Jennifer Rice

Creating competitive advantage through sustainability

I just published a post on my business blog outlining the five steps to creating competitive advantage through sustainability. Go take a peek and let me know what you think. 

Proving values-based business is the most fruitful

I was recently interviewed for Gennefer Snowfield's Philanthropy In 5 series at TriplePundit.com on the subject of values-based business and aligning philanthropy with strategy. You can read my responses on my business blog. 

Don't cut CSR spending; reallocate to build your brand

As consumer expectations rise and trust in corporations decline, the need for ethical business practices is greater than ever. Yet in a recession, companies seeking to cut costs will likely postpone important CSR initiatives or cut spending in favor of core business initiatives.

But it doesn’t have to be either-or. Companies that consider social and environmental initiatives as potential innovation platforms and brand builders — not expenses — will come out ahead...

For prioritization frameworks and retail industry example, continue reading on my business blog.

Five strategies for building your ethical brand

There's been a lot of discussion about elevating corporate responsibility to become a strategic driver of your business. Most companies would like to benefit from their ethical efforts in the form of increased customer attraction and loyalty, yet few have figured out how to do it successfully. When marketing and PR are relied on, it can often backfire in accusations of greenwashing. The secret is to apply brand strategy principles to build your ethical reputation.

Continue reading on my business blog.

Lessons in responsibility

Ok, I’m a bit late to the game, but I just stumbled upon Liberty Mutual’s The Responsibility Project that was launched last year. The discovery led me to investigate whether its focus on responsibility was rhetoric or real...

Continue reading this post on my new blog site.

Top 10 reasons to align business strategy with social impact

As I've been talking with people about Fruitful's mission to advance "conscious capitalism," it's become clear that social impact is often perceived as a nice-to-have rather than a critical component to business strategy. Here are 10 reasons why you may want to help your company rethink that notion.

1. You're looking for profitable growth. According to Ethisphere, the world's most ethical companies have seen a growth rate twice that of the S&P 500. And A.T. Kearney recently reported that sustainable companies are outperforming their rivals during the downturn. 
2. You need to reduce operating costs. For example, Sun Microsystem's new datacenter in Broomfield CO saves over $1,000,000 in electrical costs and reduces Sun's corporate carbon footprint by 6%. Wal-Mart set a goal to reduce packaging in the supply chain by 5 percent by 2013. Reaching that goal would prevent 660,000 tons of carbon dioxide from entering the atmosphere and save the company more than $3.4 billion.
3. Your industry is contributing to social problems. Tobacco and lung cancer, fast food and obesity, oil and war, autos and global warming... it's tough when your entire category carries negative associations. Forward-thinking players in these categories should be thinking about how to disrupt their own businesses before someone else does. Examples include BP's investments in alternative energy, McDonald's healthy menu and the Toyota Prius. There's definitely still room for improvement, but hey, progress is progress.
4. Your brand or business is capable of being part of a social solution. GE was already in the business of solving energy and water issues, so it wasn't a stretch to create the Ecomagination commitment to become a leader in sustainable energy. Nike's brand is all about unleashing potential through sport, which is an umbrella that easily covers social issues like childhood inactivity.  
5. You're lagging behind committed competitors. In today's transparent world, you don't want to show up at the bottom of an industry review on CSR practices. To be on enlightened consumers' consideration sets, you really need to be in the top 2 or 3. Case in point: ClimateCounts pocket guide shows consumers how to "vote with their wallet" by presenting the best and worst companies across a range of industries in supporting climate change. 
6. You''re in danger of (or in the middle of) a PR nightmare. Nike got on the CSR bandwagon after being accused of child labor violations.  Unilever and Starbucks were more proactive, identifying social and environmental challenges in coffee and tea plantations and transforming potential liabilities into triple bottom-line advantage. Lately the financial industry has taken a big trust hit; look for more alignment with and promotion of ethical business practices here.
7. You're looking for differentiation in a highly competitive industry. Whole Foods disrupted the grocery market. Clorox' GreenWorks is a visibly different option in an overwhelming mass of cleaning products. UK retailer Marks & Spencer's Behind the Label initiative strengthened their brand and boosted profits by 28% in one year. One article notes that "by challenging consumers to 'Look behind the label' M&S has increased pressure on its competitors to demonstrate their own efforts."
8. You want a unified, passionate workforce. GE found that its Ecomagination initiative had a positive and unintended side effect; employees became more energized and broke down silo barriers to help contribute to the cause. According to Kellie McElhaney in Just Good Business, "GE's CSR program turned out to be one of the highest-impact internal unification strategies that the company has ever implemented." 
9. You need to boost customer loyalty. It costs more to gain a new customer than keep an existing customer, so loyalty is one of the easier ways to grow revenue. Loyal customers also serve as a volunteer army of word-of-mouth advocates. Goldman Sachs referenced studies that show consumers identify "being socially responsible" as the most likely factor influencing brand loyalty at 35%, compared with lower price (20%), easily available products (20%), product prestige (3%), company shares your values (14%) and quality (6%).
10. It's the right thing to do. You spend most of your life sitting behind a desk; why not make that time worthwhile?

CEOs not seeing CSR as driver of long-term success

In reading PWC's 12th Annual Global CEO Study, I found the chart on "drivers of long-term success" during the downturn to be insightful on how CEOs view corporate social responsibility.

Specifically, while 63% rate brand strength and reputation as critical to success, CSR falls to the bottom of the pack with only 20% perceiving it as critical.

These findings suggest that business leaders are not seeing CSR as a strategic way to strengthen their brand and reputation. Interesting.

As I talk to people about Fruitful's mission to align business strategy with social impact, most people immediately think of philanthropy. Few see social impact as a strategic growth platform integral to the brand and business. I believe that will change given consumers' lack of trust in "business as usual" and the increase of businesses that perceive no conflict between the desires of shareholders and society at large.

GE is a great example of a company that has so tightly aligned CSR with their brand that it's hard to tease the two apart. "Ecomagination is a business initiative to help meet customer demand for more energy-efficient products and to drive reliable growth for GE; growth that delivers for investors long-term."

Eventually, the 80% of business will follow the 20% of leaders like Immelt who value the business-critical role of CSR (or as I've redefined it, corporate social opportunity.) As Immelt once said, We’re not in the business of hobbies. We're in the business of making things that are economically justifiable."

Are you relegating social impact to philanthropy or feel-good programs? Then it's time to shift your thinking about social impact from hobby to win-win competitive advantage. Yes, you may have to cut some pet projects to reallocate CSR resources to better support and align with your brand and business goals. You'll find that it will pay off.

Corporate social opportunity

NYT had a great article a couple days ago called Solving A Social Problem Without Going the Non-Profit Route.

What to call these innovative businesspeople is the subject of some debate. The terms “social entrepreneur” and “social businesses” are generally used to characterize people and businesses that bring entrepreneurship to ventures that have a social mission. Yet there are those who would limit the social entrepreneur label only to those without any profit motive. A separate, but related, category are companies referred to as “socially responsible.” These are generally companies whose core business does not necessarily have a social mission, but who display socially responsible characteristics, like environmental sensitivity.

I'm using the term Corporate Social Opportunity to refer to businesses with a desire to do well by doing good. CSR, or corporate social responsibility, only goes so far... it often refers to what a business should stop doing (stop wasting resources, stop turning a blind eye to unfair labor practices, etc.) but it doesn't truly address the opportunity at the intersection of profit and social good.

The NYT article focuses primarily on start-ups, but plenty of established companies fall squarely in this realm. Whole Foods is a good example, and even Walmart, which is already making an impact in packaging, detergent and consumer electronics industries to be more sustainable.

do the right thing

I just received a pointer to www.dotherightthing.com, a community-driven site that collects news stories about companies and assigns a social-good rating based on the collective news-story ratings by readers. Check it out and see how your company rates.

Virgin's socially good businesses

Virgin offers a great case study of a company that's seeking ways to align inputs and outputs with social good to create both competitive and societal advantage. They're making an active effort to not only run more sustainable businesses, but also to integrate social good into the customer experience and raise awareness and social engagement among their customers.

Inputs (behind-the-scenes business operations)

• Virgin Atlantic's sustainability manifesto outlines 29 steps to making their business as sustainable as possible.

Outputs (customer-facing products, services and touchpoints):

• Virgin HealthMiles is a first-of-a-kind health incentives program that empowers Americans to take greater control of their health and fitness. In a pilot deployment in 2006, 40% of members who had previously been categorized as inactive moved up to the active category. Additionally, 21% of members saw a reduction in hypertension over a period of six months.

Inputs as Outputs (turning sustainability into competitive advantage)

• Virgin Trains is actively marketed as the more sustainable travel option compared to cars and planes. They also launched Europe's first 20% biodiesel train.

They're also leveraging the power of community, actively engaging customers in socially good actions like:

• VirginUnite, Virgin's non-for-profit entrepreneurial foundation. In addition to being a social entrepreneur incubator and a consultancy to Virgin businesses to be a force for social good, it's also a facilitator to help everyday people start their own fundraisers.
• Virgin Mobile's RE*Generation, a pro-social initiative to build awareness about the issues surrounding at-risk youth and teen homelessness. Musicians donate ringtone royalties on selected tracks, and Virgin Mobile donates 100% of net profits from the same selected tracks. Virgin Mobile customers can also contribute to The RE*Generation by sending a text message to deduct $1 from their balance as a contribution or making a cash donation via credit card at VirginUnite. Their blank2clothe initiative, in partnership with American Eagle Outfitters, donates clothing to homeless youth for every 5 videos that customers upload. 

I'm compiling a list of companies who have baked social good into their brands, and will be writing about them on this blog. If you have other examples (Whole Foods, Ethos water, Timberland, Zipcar come to mind) I'd love to hear about them.

Does being ethical pay?

I just ran across an article in WSJ that answered the question,"How much are consumers are willing to pay for ethically produced goods?" These statistics are only among coffee drinkers (cotton t-shirt buyers had a much narrower range of price elasticity) but it's a good data point that the "conscious consumer" is no longer a niche market segment.

A recent study called Rethinking Corporate Responsibility by Fleishman-Hillard and the National Consumers League gives even more evidence. 52% of consumers seek out the CSR record of specific companies, and 82% say that social responsibility is influential in purchase decisions.

I think most companies understand this and are making efforts to improve their business practices. Some are leading the way and others are lagging, but for the most part I'm optimistic that progress is being made.

What about you... optimistic or pessimistic about businesses' abilities to meet both shareholder and consumer expectations?

Let's be the change we want to see

New Years Day. Always a time of deep introspection, reflection and reiteration of what I want my life to be all about. I like to think about my life in relation to the whole; in other words, what do I want my relationships, family, business, etc. to be like, and what actions must I take to make that happen?

Along these lines, I couldn't help but think about some of the major trends in business today. There's been so much written about the failure of corporate America to satisfy the needs of customers, and in an attempt to fix the symptoms we've created new mantras (create customer evangelists!), new technologies (CRM), special programs (frequent flier miles), and the list goes on.

But who, exactly, is "corporate America"?
We are.

The corporate transformational change that we consumers have been crying for will happen when we -- the consumers, the customers, the employees -- begin living the changes we want to see. Instead of fixing the symptoms, let's address the root cause. Putting the blame on faceless corporations is the same error as putting the blame on our spouses, our co-workers, our families. Not only are we all connected, but we ourselves are individual components of multiple intersecting wholes.

We, the individuals who make up today's society, have created the world we see today. We've made -- and are continuing to make -- different choices than our parents and grandparents did at our age. These choices have created consequences that we often don't want to recognize or own, so we point outside ourselves and declare the culprits to be the big bad corporations (for whom we work) and government officials (whom we elect) and 'the system' (which we accept).

So what are these choices? Here are a few factoids from Bowling Alone that indicate that our social and family ties are loosening, and we're increasingly withdrawing into ourselves:
- In the past 3 decades, participation in government, local clubs and organizations dropped by up to 50%.
- Job instability, churn and the increasing numbers of independent contractors have resulted in a measurable decline of social connectedness in the workplace.
- Americans are entertaining friends at home 45% less frequently now than in the mid-70s; the number of picnics declined by 60% in the same time period.
- The fraction of married Americans who say that their family 'usually dines together' has dropped from 50% to 34%
- The number of families who vacation together dropped from 53% to 38%; watch TV together from 54% to 41%; sitting and talking, from 53% to 43%
- Reported charitable giving dropped by almost 20% from 1980 to 1995.
- The percentage of those who feel that "people in general today lead as good lives -- honest and moral -- as they used to" dropped from 50% in 1952 to 27% in 1998.

It's interesting to note that these percentages have remained more stable in small towns versus large cities. It's tough to be impersonal in a small town, but quite easy in a city. It's harder to be impersonal when you run a small business than when sheltered in the walls of a large corporation.

These statistics don't just show trends; they reveal our choices. We have chosen -- under the veil of 'too busy, not enough time, not enough money' -- to distance ourselves from our families, our co-workers and our communities. As isolated individuals, it's much easier to forget that we're part of a whole; that we're interconnected with everyone else and that our choices impact others as well as ourselves. We have made these choices individually but the combined effects are now reaching critical mass. How can we connect with a customer when we're not making meaningful connections with our own loved ones?

The lack of corporate/customer relationships is just the tip of the iceberg; it is symptomatic of a much more far-reaching issue. We've somehow adopted an us versus them mentality: not only between companies and customers, but between departments within the same company, between neighborhoods, races and religions. For real change to happen on the corporate and societal level, each one of us must first decide to build richer relationships within our own sphere of influence.... the forged bonds will move upward and outward, but we must start at the core, where we live. We must start by breaking down silos and walls within our own communities and companies and neighborhoods; by reaching out to others with compassion instead of holding back in distrust.

In a similar vein, we're calling on corporations to be more authentic, transparent and honest. Yet how will that happen if we're not transparent and honest ourselves? We so often are fearful of what others will think that we lose sight of our own authenticity. Political correctness has its limits. It's time for both individuals and businesses to stop trying to be all things to all people, and give ourselves permission to live honestly, and -- most importantly -- allow others to live their own truths without trying to change them. Each employee, each member of the whole, must be encouraged to live their own personal brand honestly and openly. When that happens, authentic and transparent corporate brands will naturally fall into place.

So perhaps our 2004 resolutions need not be so mundane. If each of us chooses to take ownership of our small section of the vast social fabric that ties us all together -- to tighten it up and halt the unravelling, not just with technology but with our own authentic goodness -- our society can be irrevocably changed for the better. Speaking for myself, I plan to seek out ways to be more authentic and transparent, more compassionate, and more willing to make time to deepen my connections with others. These are a few of my New Years resolutions; I hope you'll join me.

Favorite quote of the week

As I've been surfing around over the past week, there's one statement that really jumped out at me that I wanted to share here. It's at the end of John Porcaro's post about scarcity: John Porcaro: [email protected]: Your Economics Professor Was Wrong

Technology will always progress, allowing us to do more with less--breaking the laws of scarcity. And with the rapid adoption of technology, it's happening even faster. So Seth's right: it's going to take smarter, more dedicated people to make real money, and the rest of the world is going to resort to operating on the razor-thin lines of zero profit due to perfect competition. What's really scarce? Wisdom. Courage. Honor. Relationships.

Ahhh. Those words are so scarce in our society and in general business that it's gratifying and nourishing to see them in print. Thanks, John, for the wonderful reminder.