mutuality: financial profit with social good

Copyright Tom Woodnu1 Ltd.

Mutuality: financial profit with social good

October, 2013

www.feelingmutual.com @tomwoodnu1


Doing social good and making profit are compatible aims….

…This paper argues that it is more likely when the ethos of mutuality Is embraced because it helps build stronger brand rela@onships (meaning more long term profits) . . . The presenta@ons includes an analysis of the key challenges preven@ng this from happening, before arguing that the principle of mutuality can be a big part of the solu@on.


The link between doing good and making money is well-established

Most sustainability decisions are driven by the desire to grow1 and make profit2

There are many paths to profit via social good, including3:

-‐  improved efficiency -‐  innova@on -‐  employee engagement ….to name a few

SOURCES: 1 -‐ ‘Long-‐Term Growth, Short-‐Term Differen@a@on and Profits from Sustainable Products and Services,’ Accenture, May 2012 2 -‐‘Corporate Ci@zenship: Profi@ng from Sustainable Business’, The Economist Intelligence Unit, 2008 3 -‐ ‘The Top 10 Trends in CSR for 2012’, Forbes, by Tim Mohin, 18/1/12


This paper focuses on its contribution via improved brand relationships

Psychologists have linked Corporate Social Responsibility (CSR) ac@vity to people being more likely to advocate and buy brands1 Similarly, according to a recent Harvard Law School study2 the benefits of social good include: “customer loyalty, willingness to pay premium prices, and lower reputa5onal risks in 5mes of crisis” AKA: ‘deeper brand rela@onships’

SOURCES: 1 -‐ ‘Du, Shuili, C.B. Bha1acharya, and Sankar Sen (2007), ‘Reaping Rela@onal Rewards from Corporate Social Responsibility: The Role of Compe@@ve Posi@oning,’ Interna5onal Journal of Research in Marke5ng, 24 (3), 224-‐41. 2 -‐ ‘Inves@ng in Corporate Social Responsibility to Enhance Customer Value’ by Noam Noked, HLS Forum 28/2/12


Today’s brands can’t afford to ignore their social responsibilities

Companies that do ‘social bad’ are being exposed by hyper-‐connected networks of hyper-‐cri@cal consumers1. Studies2, 3 show that people not only expect social responsibility but cri@cally, that they are willing to work with them to help achieve this. Doing social good has become a shared obliga@on with the public too. Mutuality is about tapping into a common desire to create shared value for businesses, brands and society.

SOURCES: 1 -‐ ‘Good Business: The business case for social brand behavior’ By Faris Yakob, 2012 2 -‐ 2012 Edelman goodpurpose® study 3 -‐2012 Cone Communica.ons Corporate Social Return Trend Tracker

SOURCES: 1 -‐ ‘Good Business: The business case for social brand behavior’ By Faris Yakob, 2012 2 -‐ 2012 Edelman goodpurpose® study 3 -‐ 2012 Cone Communica.ons Corporate Social Return Trend Tracker


The challenge to maximise profits by doing social good is increasing

As more brands increase their investment in social good, it will become harder to make it dis@nc@ve and inspiring. Success will require proper investment, insight, dialogue, collabora@on and strategic crea@vity. Doing social good, must be sufficiently strategic to deepen brand rela@onships.


There are several challenges to building brands through social good The main problems limi@ng the poten@al impact of social good on brand rela@onships (and therefore long term profits) are inter-‐related and fall at different levels: 1 -‐ (Business Level) Brands’ social good strategies are oien peripheral 2 -‐ (Consumer Level) Social good ini@a@ves frequently fail to engage people 3 -‐ (Brand Level) Social good regularly fails to build the brand op@mally


1 - Strategy for social good is often peripheral

According to Milton Friedman: ’The main responsibility of business is profit’ 1 This relegates socially good business prac@ces into a lower league of importance compared to tradi@onal profit drivers like marke@ng, opera@onal efficiency and innova@on. Unsurprisingly, studies2 suggest that stakeholders in charge of CSR oien feel disempowered and are all too oien segregated from other departments2. It is not surprising that doing social good is oien peripheral to other business concerns.

SOURCE: 1 -‐ ‘The Social Responsibility of Business is to Increase its Profit’, by Milton Friedman, The New York Times Magazine, September 13, 1970 2 -‐ h1p://blogs.law.harvard.edu/corpgov/2011/02/28/inves@ng-‐in-‐corporate-‐social-‐responsibility-‐to-‐enhance-‐customer-‐value 3 -‐ ‘Integrate And Prosper, Cross-‐department collabora@on is the key to mo@va@ng employees and driving revenue. by Chris@ne Crandell, 6/4/09


2- Social good initiatives often fail to engage people

The lack of investment or concerted effort in crea@ng socially good ini@a@ves means they are oien boring1 or simply unknown. This is made worse by the tendency for CSR communica@ons to default to corporate language that fails to connect with the mainstream public2. Many ini@a@ves are short term rather than on-‐going. Worse s@ll, social good ini@a@ves can be met with cynicism from people who sniff out any inconsistencies. For example, KFC’s cancer charity campaign was accused of ‘pink wash’ on social media since its product was also cri@cised as being a contributor to the illness in the first place3.

SOURCE: 1 -‐ S-‐ROI Metric Enables Triple-‐Bo1om-‐Line Decision-‐Making’, Sustainable Brands, 18/9/12 2 -‐ From Babel To Nirvana: Six Quiet Rules for Shaping Life-‐Sized Messages and People-‐Powered Movements, By Julian Bora, Sustainable Brands 3 -‐ ‘The Pinkwashing Debate: Empty Cri@cism or Serious Liability?’, Amy Westervelt, 11/4/12


3- Social good initiatives often fail to reinforce the brand strategy

Given a general lack of inter-‐departmental collabora@on and therefore an uninspiring standard of many social good ini@a@ves, there is too oien a weak connec@on between CSR and brand or marke@ng strategy. At worst this can lead to contradictory communica@ons, such as General Motors’ ad campaign targe@ng students with the message: “Stop pedalling, start driving”. It was widely a1acked for its denigra@on of student cyclists and contradicted their website claim that they “ac5vely par5cipate in educa5ng the public about environmental conserva5on” . The irony did not go unno@ced across social media.


The solution is not simply a case of money

The example of the ‘Pepsi Refresh project’ shows how big budgets and converging social good strategy with marke@ng and PR can s@ll fail to grow profits. In 2011, Pepsi bravely shunned their tradi@onal Super Bowl spot and instead commi1ed $20m to social causes as voted by the public across social media. Despite an incredible 61 million responses. their sales suffered during the period. It could be argued that this was because the execu@on was so incongruent with its core brand equity (rooted in pop culture) so it failed to sustain the brand’s relevance.


How the principle of mutuality can help…

I believe that the principle of mutuality can help overcome these problems. In nature, mutualis@c rela@onships are symbio@c and based on mutual gain. Like the rela@onship between the sea anemone and clown fish, who live side by side, protec@ng one an other from their predators. It has been defined as ‘a state of reciprocity and sharing’. Collabora@on and value exchange between par@es results in harmonious rela@onships that are equitable, well-‐balanced and fair

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Mutuality can help make business better (and more profitable)

Mutuality means: 1 – understanding people be1er 2 -‐ smarter collabora@on 3 -‐ more shared agendas 4 -‐ greater reciprocity 5 -‐ strategically building the brand


1 - UNDERSTAND: Mutuality requires a collaborative understanding of people Mutuality is founded on a true understanding of different par@es’ needs. When strategy is tuned into a shared agenda, it is possible to create win-‐win scenarios and shared value1. However, tradi@onal research is oien based on a narrow, commercially defined client agenda. This means that social issues are oien ignored. Open lines of digitally facilitated dialogue between brands and people makes it easier to generate the feedback and data necessary for S-‐ROI calcula@ons, which are vital to building the case for investment2.

SOURCE: 1 -‐ Crea@ng Shared Value, by Michael E. Porter and Mark R. Kramer, Harvard Business Review, Jan 2011 2 -‐ h1p://www.demos.co.uk/files/Measuring_Up_-‐_web.pdf


2 - PARTNER: Mutuality is about creating shared advantage together Mutuality is also about working together in strategic partnerships for mutual gain. Working in partnerships is more likely to create experiences that add value to both brands and society. Examples include Orange who teamed up with RockCorps to reward their customers for giving @me to charitable causes in return for @ckets to exclusive gigs. Similarly P&G1 teamed up with Save the Children to promote sanitary products in developing countries. Their brand benefited by associa@on and by crea@ng demand for its products while Save the Children helped reduce the school drop-‐out rates among young women.

SOURCE: h1p://www.guardian.co.uk/sustainable-‐business/ngos-‐partnering-‐businesses-‐accelerate-‐shared-‐value?INTCMP=SRCH


3 - INTEGRATE: Mutuality means seeking cross-departmental synergy Mutuality means diverse departments rallying around a social idea. Marks and Spencer’s Plan A involved ambi@ous sustainability targets and the mobilisa@on of all stakeholders. This created an addi@onal £50m revenue in 20101. Ben and Jerry’s1 rallied departments around its ambi@on to be the first wholly owned subsidiary brand to join the B Corpora@on movement (which involves high standards of social performance) Such synergy and cross departmental investment requires board-‐level buy in. . .

SOURCE: 1 -‐ h1p://[email protected]/the-‐new-‐csr-‐this-‐@me-‐its-‐profitable/3025435.ar@cle 2 -‐ h1p://www.guardian.co.uk/sustainable-‐business/ben-‐jerrys-‐b-‐corpora@on-‐social-‐responsibili@es?INTCMP=SRCH


4 - RECIPROCATE: Mutuality means earning the kindness of the crowd Mutuality is driven by our ins@nct to reciprocate1: “We are human because our ancestors learned to share their food and skills in an honoured network of obliga5on.” People will socially reward brands that show a genuine commitment to social causes, especially when invited to join in. Like US bank Chase, who let facebook fans choose where to donate $1 million and got 4million fans in the process As Simon Mainwaring points out in ‘We First’, brands and society can benefit from this two-‐way dynamic.

SOURCE:

1 -‐ R.Leakey and R. Lewin (1978) People of the Lake. New York: Anchor Press / Doubleday 2 -‐ We First: How brands and consumers use social media to build a be1er world, By Simon Mainwaring, (2012)


5 – BE STRATEGIC: Mutuality is about brands ‘proving their purpose’ For companies to do social good in ways that strategically build their brands they have to ‘prove their purpose’ (in the words of Jens Bang from Cone Communica@ons). An example of this is Levi’s1 ‘Go Forth’ campaign which featured real farmers from a struggling town in Pi1sburgh to celebrate its pioneering spirit. They demonstrated a true commitment, by inves@ng $1million into local projects and farms. Similarly, Haagen Dazs rooted its social good efforts into an issue of direct relevance to its product: the threat to the honey bee popula@on. They received over half a million #savethebees tweets in one week, and gave $1 for each one.

SOURCE:

1 – h1p://www.forbes.com/2010/07/09/pepsi-‐macys-‐twi1er-‐@de-‐levis-‐adver@sing-‐responsibility-‐cmo-‐network-‐imagina@ve-‐csr.html


In conclusion: Mutuality can inspire profits, social good and coaction Social good can help maximise profits when ini@a@ves are strategically aligned with building the brand. However, it is not simply the responsibility of the corpora@on. It is a shared obliga@on between customers, employees and companies. This is what Cindy Gallop has described as the business model of the future; one based on the equa@on: “shared ac5on plus shared values equals shared profit: Financial profit and societal profit.” Mutuality provides the necessary understanding, collabora@on, shared agendas and reciprocal value, to make social ini@a@ves profitable for society as well as the bo1om line.

SOURCE:

1 – Cindy Gallop: it's @me to rethink the adver@sing business, The Guardian, 26/9/12


If you are interested in finding out how mutualis@c thinking can help your brand or issue…..or you’d like to help develop the idea, please do get in touch…

Twi1er: @Tomwoodnu1 E-‐mail: [email protected] Blog: www.feelingmutual.com

mutuality: financial profit with social good

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