Legacy

Reputation and Profits: The "Good Corporate Citizenship" Question

In the world of Buzzword Bingo or your standard corporate blah-blah-blah, one of the favorite expressions that marketing and PR folks like to use for their clients - especially their Big Boy clients - is that they're "good corporate citizens."

Just so you know how 'true' that is, Enron was one. Their marketing people said so.

It's an interesting question, though. What, exactly, is "good corporate citizenship"? What do you have to do to be a "good corporate citizen"? And why should you bother?

The reason why you - and I mean you, personally - should bother is because it's all about your reputation. Your image in the larger society in which you operate - whether you're the local dry cleaner or a global player - is greatly impacted by how you're perceived to treat the area and people in which your organization exists.

But, you say, we're a Big Boy multi-national? We're everyplace. How are we supposed to really do the "good corporate citizen" thing...and why should we?

Take a moment and think about Jack Welch, the so-called "legendary" former CEO of General Electric.

Did he accomplish amazing things in his company? Yes. Did he create shareholder value that exceeded anyone's dreams? Yes.

Did he, by fighting regulators for over 10 years after it was found that GE was polluting the Hudson River with the cancer causing agents, PCBs, not only put the population of the area but his company and its reputation at risk...as well as taint his own reputation? Yes to that, too.

So much for good corporate citizenship and the renowned Mr. Welch. Even now, over a decade later, when Jack Welch puts himself forward, someone remembers the Hudson and what he didn't do.

It's a good thing for GE that Mr. Welch's successor, Jeff Immelt, understood and acted upon the good image and good business of being a "good corporate citizen" - because he turned around the hit that GE's reputation took, both locally and globally. His smart decisions and 'green' strategy, put them back on track to be a trusted partner and corporate provider.

But it doesn't take a giant effort like GE's to make the "good corporate citizen" difference. You achieve just as big - if not bigger - gains by simply showing your support in your local area.

And for that, let's look at Larry Ellison, yet another "legendary" CEO - who founded and runs Oracle.

Ellison's reputation is as a near wild man - and he seems to thrive on it.

That's okay, because his company does things like support the local community where they're headquartered by being a major sponsor of a money-raising effort to ensure that music continues to be taught in the schools.

From the locals' perspective, that makes Oracle a good company. What that turns into, for all the IT managers, business executives and SMB owners whose kids go to those schools, is that Oracle becomes a preferred provider.

What does this mean for you?

It means it's time to start taking your role as a "good corporate citizen" seriously. It's time to go beyond using the pretty words and put your money where your marketing mouthpieces are saying you are.

It doesn't take a lot - but it does take a decision. Your decision.

What do you want your and your company's legacy to be? How do you want to be seen now and in the future?

More importantly, how do you want to use your good corporate citizenship - your investment in the betterment of society through business - to make a difference in people's lives...and your company's profits...now?

It's time to do something different. Business isn't only about profits. In fact, in your company and on the larger scale, profits are simply there as fuel for growth. Yours and society's.

Be a good corporate citizen by doing real things that make a difference. A real difference.

That's what you'll be remembered for - even as everyone who sees what you're doing make their decision to buy what you have to offer now.

BP and Corporate Responsibility: Avoiding Present and Future Tragedy.

What's going on in the Gulf right now is a tragedy.  There are few other ways to describe it.

It's a tragedy because of the human lives that were lost and the lifelong grief that the families and friends of those who died will endure.

It's a tragedy because of the devastating impact it is having - and will continue to have for years - on the environment into which the oil is spilling.  The death it brings and suffering it is and will continue to have on the animal, bird and plant life - due not only to the spill but to the actions being taken to address it - is incalculable in any currency.

It's a tragedy because of the livelihoods of those who live in all the areas impacted.  Generations of fishermen for food and sport, the associated industries - from hotels in the vicinity to manufacturers of parts for fishing boats that may never be needed again, the many and varied members of the supply chains that have supported the movement of the fresh food caught to the worldwide audiences who enjoyed them.  All and more will suffer for years to come.

And it is most of all a tragedy because it was avoidable.

We do not know the full facts, yet, of what led up to the blowout preventer's failure.  While that is and will be important, what's far more important is what the now consistent drip, drip, drip of information that is coming to light means for corporations and the governments who regulate them.

Each time Tony Hayward, BP's Chief Executive, makes another statement, the trust and belief in everything from business success to corporate R&D is eroded that bit further in the public's mind.  Globally.

Worse, deservedly.

As statements such as his financial breakdown to BP shareholders reporting the very small percentage of the cost of the Gulf Spill to date on the company's profits are made public to a much wider audience, the lack of care that is perceived for the human race and the planet becomes palpable in the public's mind.

BP, like Enron and others, become the name-brand entities that neither can nor should be trusted.  They become the public watchword for how corporations aren't simply uncaring.  They are destructive and dangerous.

From an organizational perspective, this has incredibly and increasingly large implications.

Those internal memoranda and reports as well as the witness testimony being provided in the early-stage hearings simply dig a deeper and deeper hole into which BP, Halliburton, TransOcean and Cameron are falling in the public's mind.  And as they should also in each and every corporation's mind.

Because those data show a continued focus on cost and time.  Not on safety and care.  The arguments and pressures that are reported - within and across the organizations involved - make a compelling case for profit.  Not safety.  The deals cut and pressures put to bear - even on regulatory agencies, which, on many more human levels, deserve distrust and contempt - show that speed was the thing.  The fastest speed to profits.

Back to the corporations, they made promises to regulators which those same companies involved now seem to be saying - and demonstrating - couldn't be kept.  Even whether the disaster-recovery plans that were put forward in case of an emergency were adequate or workable weren't known to be workable.

In effect, prior to drilling, 200 feet was the same as 5,000 feet.  Now that a disaster is in play, there's a really, really big difference between 200 feet and 5,000 feet.

Somehow that wasn't the case just a few months earlier.

But we have what we have - and it becomes a lesson to executives, if you're paying attention.

Pay attention - because on everything from a smaller to a same scale, this can happen to you.

First and foremost:  Never put profits before safety.

That means that, no matter what your organization does, you make sure that policies and procedures in place are designed to ensure the safety of your employees and of the end-users.  Then you make sure that those policies are enforced.  Always and consistently.

Think about it.  From Toyota having to recover its reputation as the highest quality automobile manufacturer to Chinese manufacturers of toys and toothpaste to BP and its now much-publicized "safety" record of deaths in their operations, more time, money and reputation (the three most valuable corporate currencies) is spent on the fix after the fact than would ever have to be spent if the problems had been addressed from the first - when they were identified.

As well, the fix isn't a fix in the eyes of the public.  Toyota will always have a question mark over its name now.  Chinese manufacturers are actively distrusted.  And BP is becoming known as a death-trap for employees and the planet.

That's not going to go away.  In fact, every time any industry in the same sector does something wrong, these examples - and more - will be brought up again and again.

Second:  Suspend disbelief and plan accordingly.

Ninety-seven percent (yes, that's 97%) of what happens in an organization is predictable.  It may not be what you want but you can predict it.

That means that there is only 3% that you can't imagine ever happening.

What that also means is that, because there have been oil spills and drilling disasters in the past, the Deepwater Horizon disaster was part of the 97%.  It was predictable.

Even the failure of the blowout preventer was predictable.  After all, they, too, had failed in the past.

As an executive - and with your executive and management team at all levels - you have to look at what is to determine what can be.  You may not like it, but it's predictable.  And that means that, sooner or later, it's going to happen.

The only 3% component of this disaster is, possibly, its extent.  Possibly not.  After all, BP knew what the oil reservoir was that it was drilling into.  Their scientists also knew the pressures and temperatures at which the drilling would be taking place.

All of that was known prior to any of the consequences that are now in play.  That means that the disaster recovery plans were knowingly inadequate too.  And that's a corporate decision.

Third:  Take the hit.

If your organization does something wrong - from a mistakenly filled order to creating a human and environmental disaster - own up to it.  Not just in pretty words - but, consistently, in your actions as well.

BP seemingly continues to try to game the system for its own and its shareholders' purposes.  From using a dispersant known to be illegal for use in the company's home country to requesting a specific judge to oversee all the future cases brought against the company to trying to settle the early and current cases out of court as quickly as possible, all it looks like is that - even while Hayward continues to say that it's BP's responsibility and it is taking all the actions it can to stop the leak - behind the scenes, all he's trying to do is do further damage to and cheat the people most impacted by his company's actions.

If, on the other hand, you take the hit and own up, customers know that when something goes wrong, you're on their side to fix it.  That has a value far beyond any immediate or mid-term gains - because rather than being remembered for what you did wrong, your organization will have the invaluable reputation for one that is committed to making things right.

Which brings me to the fourth lesson - and it is a personal one.

Think about your legacy.

Within and outside your organization - public or private sector - you're going to be remembered for what you do.  It doesn't matter whether it's wholly internal or splashed all over the online and other media.

Did you keep your word?  Were you fair?  Did you bring an integrity to everything within the organization?  Do the people whose lives you touched - within and without - think well of the organization you led because of your leadership?

Corporate responsibility sounds like a typical "blah-blah-blah."  It's not.  It's all about you, who you are and what you stand for.

CEOs, of course, have a responsibility to their shareholders.  But as a corporate leader, executives and managers at every level have a greater responsibility.  That's to the much broader defined population your organization and its products and services touches.

So, when you think corporate responsibility, think your responsibility and legacy.  Think about what your kids would think of you - knowing everything there is to know.  Then think about how you want them to think about you:  honest, trustworthy, thoughtful of others and others' needs.

There's no reason that can't be your corporate legacy.  It can.  But to get there, you have to actively and conscientiously lead your organization there - every step of the way.