ThinkingSparks

What happens if a partnership network doesn't share values

The other day I wrote about how to deal with a corporate brand in a partnership network. My view on it is that shared goals are not sufficient. You also have to share values among the partners. Be it a traditional supply chain, a network, a lateral partnership or a multilevel marketing organization.

Share goals and values increase congruent and thus consistent behavior in the network. Consistent behavior is needed to build a consistent brand during all moments of truth.

I came across an intersting article in USA Today. It talks about Amway and organizations like it. The whole question of them being MLM organizations or pyramid schemes isn't my point here. The relevance of the story is that Amway claims to have a code of conduct and apparently some of their distributors do not behave according to this code. It is similar to having laws and people breaking these laws.

Codes of conduct are nice but if people do not subscribe to the values that are the foundation of this code of conduct, they will have trouble living by these rules. It shows that sharing values as well as sharing goals is important.

Read the story for yourself. It is a good illustration of what happens when you do not share values within a partnership network.

How cheating students cheat everyone

Before I became an exchange student to the USA over a quarter of a century ago I was prepped. I was told about and explained American values that I would encounter and would have to adjust to. One that was profoundly hammered into my consciousness was "do not cheat at school". I had never cheated at school so I had no reason to begin now, but I was impressed by stories about American students being left alone in their classroom during an exam and not cheating. It was a matter of honor.

When I taught evening classes to adults at The Hague University I was flabbergasted when I found out that grownups cheated on papers and exams. What I found even more shocking was that they weren't kicked out onto the street. This probably has to do with the ludicrous rule that Dutch universities receive financial backing from the government based on the number of students that graduate. Quantity. Not quality.

At my university there was a formal rule that you couldn't do anything that would damage the institutes' repuation. I think it is evidence of the insight that an educational institution has many moments of truth and everyone involved is responsible to uphold the brand image.

In Dutch news over the last couple of weeks it has become apparent that at several universities students have been getting away with cheating.

I don't get cheating, because eventually you end up being caught. Maybe not by the school, but future employers and colleagues cannot rely on your knowledge and expertise. But that is not the worst of it. What does it say about your character? How many other lines are you likely to cross? How can Dutch organizations be socially responsible if they are hiring unethical cheating graduates?

This situation is bad in a lot of ways:

1. Of course not everyone cheats, but the ones that do, screw it up for all other graduates. If the news gets out that people cheated their way to graduation that piece of paper called a diploma becomes worthless. Not only for themselves but also for former, current and future students.
2. The brand of the insitution becomes weak. And as lots of regional universities have merged over the last decade or so, one brand name covers a range of programs at different locations. So the cheating may have been going on in Amsterdam at the Economics bachelor program, but everything else is infected too. So you apply for a job in Rotterdam, with a degree in Communication from Arnhem and they confuse you with the Finance cheater in Amsterdam. Tough luck!
3. Organizations will have hired the cheating graduates with questionable morality. This is not good for the morality of the organization in particular or Dutch organizations as a whole.

So what to do? A couple of things I think:

1. Become aware as a school and as a society that these practices damage your educational brands and in the end your national knowledge economy. Become aware that the quality you deliver in education results in good quality graduates. They in turn lead to a society with organizations that are able to perform and compete succesfully.
2. Parents, educators, schools and society should emphasize the positive: knowledge is power in the sense that it creates individual possibilities.
3. Honor those who do well in school. Don't scoff people for being a good student.
4. Don't keep your exams where the students or an accomplice can get to them. (I know this is basic but apparently people haven't thougt of this yet, otherwise it wouldn't have happened.)
5. Make it a rule that cheating is rewarded by being kicked out of school and not being able to apply to any other university in The Netherlands. Any cost incurred or financial backing lost by the school must be paid by the student.
6. Communicate the rule to future and current students.
7. Have students (and their parents if underage) commit to this rule when registering and enrolling. It then is a contract.
8. Live the rule. Be honest and honorable in other aspects of life too.
9. Enforce the rule if necessary.

Of course ideally, parents raise kids that aren't morally challenged. Ideally we do not need rules or laws to govern us. Ideally our moral compass would be enough. Unfortunately it isn't the case for everyone.

This is not just a Dutch problem. In the 28 years since I graduated from my American highschool, American society has shown not be immune to cheating students. Just google "cheating students" and you'll find that even in Communist China students cheat. If we should have learned one thing from the collapsing of banks and the economic crisis it is that integrity is important.

From a perspective of branding your school, your organization, your country, integrity is important. From a perspective of civil society, integrity is important too.

Am I exaggerating? I don't think so.

Are there other solutions possible? Sure! Please share them.

 

Alexis and JR

On the news yesterday morning was an item about Shell being sued for being involved in the death of Nigerian activist Ken Saro-Wiwa. On several of the news casts it was told that Shell had changed their ways and were taking their social responsibility seriously when doing business in Nigeria.

As it was only 14 years ago that mr. Saro-Wiwa was hanged for his activism, I was wondering why behaving ethical and socially responsible was such a hard thing to do back then. And is it so much easier now.

Yesterday at the end of the day while driving - the best time for thinking - I was wondering if we have had good role models in business for behaving responsibly and ethically. Maybe we do now and maybe there were examples in the past, but a whole generation grew up with Dallas and Dynasty. And I was wondering if Alexis and JR may have colored our view on how (oil) business should be done. You would certainly think so when hearing stories like those about Shell.

Authenticity by consumer demand?

In response to my post if creating shareholder value excludes authenticity, Tom Asacker, wonders if consumers care one way or the other if companies are authentic or not. Seth Godin writes:

Consumers are begging to be sold on the authentic. The easiest way to do that, of course, is to be authentic. And yet, ever since they replaced the sugar in Coke with corn syrup, who knows any more... Being inauthentic is tricky, unpredictable and often wrong. But it also works.

The fact is, most of the people want to be fooled, just about all of the time.

I question Seth on a number of points:

1. Either consumers want authentic or they want to be fooled. Which one is it?
2. Which fact proves that people want to be fooled? I would really like to know.
3. I personally hate being fooled or being treated like a fool. So I do not understand the statement that most people want to be fooled most of the time. Is that a conscious choice? In some situations? Sometimes? Or an unconscious acceptance that being fooled is just a fact of life? As long as a person doesn’t know that he is being fooled, ignorance is bliss? It must be, because knowing that you are fooled makes you feel like a fool. I think consumers don’t want to have that feeling. It is the feeling that someone has gotten the better of you..
4. Maybe it is the wish of the consumer to be fooled that has driven businesses to the lack of authenticity? I don’t think this is congruent with the power that business has or the lack of power consumer may feel.
5. Authenticity by consumer demand, claims Seth Godin, Asacker wonders if consumers care one way or the other. I think they do not necessarily explicitly care about authenticity, but they care about the consequences of businesses not being authentic. These consequences can be bad, like: Organizations not living up to their promise, Poor service, Poor products, Crappy apologies when something does go wrong,  Poor leadership, Phoney corporate social responsibility, Weak brands. Weak non-performing organizational cultures,  Enron, Ahold. The list can go on and on………..So while consumers may not demand authenticity per se, they demand the outcome of authenticity. Especially if experience is what a company sells to its customers. Fellow customers are part of the experience and authenticity is needed to pick the customers that both enjoy and enhance the experience.
6. Being authentic isn’t easy and becomes more difficult with the number of employees in an organization, number of different geographical locations of the organization, number of business units etc. etc. Besides, if it was easy to be authentic, we would not be discussing it now. Authenticity would then be a given.
7. Authenticity to me is a component of Corporate Social Responsibility. The latter is not possible without the first. Surely, Seth Godin doesn’t preach corporate social unresponsibility or suggest that consumers would want that that type of behavior from business?

I think authenticity is important, but it is also a very difficult concept to reconcile with the way business has been done.

Does creating shareholder value exclude authenticity?

In the ethics of economics the concept of normative theories is used. A normative theory is that which is a leading principle for the organization. There are two of those theories as far as I know. One is the stockholder theory and the other one is the stakeholder theory.

The stockholder theory was first described by Milton Friedman who saw it as the responsibility of businesses to increase its profits for its owners. R.E. Freeman is responsible for the stakeholder theory which basically states that there are more parties that have interests in the organization than investors, suppliers, employees and customers.

With either theory the interest of others (except employees; they form the organization) is the driving force behind the actions of businesses who subscribe to any of these two theories. And some people say that especially a stockholder theory and corporate social responsibility is mutually exclusive. Journalist Johann Hari seems to think so. The only responsibility the organization has is to make money for the stockholders. And there are others that claim the opposite. It is very well possible to follow both theories at the same time.

But as in my book being authentic is part of being CSR, can you be authentic and further other people’s interests on purpose? Doesn’t being authentic mean that you do your thing regardless of what other people think of it? Which in itself means that other people’s interests do not matter to you. Unless of course looking out for other people’s interests is part of your value set. The nature of these interests (economic, environmental etc. etc.) then start playing a role and how do you weigh these? Which interest is more important?

And how does talking of authentic brands work within organizations that are driven by creating shareholder value? Must authentic brands be socially responsible or can they be authentic without being CSR?

Stuff on which I need to do some more thinking. Several bloggers (Asacker, Lehew, Arruda, Branding Strategy Insider, BrandXpress) have written about authentic brands, I value their opinion and those of their readers. I invite their input.

Ludicrous example of Corporate Social Responsibility

In the latest issue of ODE magazine there was a small news item called Eco-friendly fire. The item discusses the paradox of corporate social responsibility within BAE Systems, Europe’s #1 weapons manufacturer (and the world’s #4). Following is what they say on CSR with regard to their products:

We aim to design products that are safe to handle and transport. For example, RO Defence, a BAE Systems company, has developed a range of insensitive munitions, using new explosives that are significantly less likely to explode in an accident.

Lead used in ammunition can harm the environment and pose a risk to people. Our RO Defence site at Radway Green is developing lead-free ammunition which will be available in 2005.

There have been concerns that the use of depleted uranium in weapons may cause harm. In 2003, we stopped using depleted uranium in our products. Our depleted uranium manufacturing facility at Featherstone is being decommissioned in compliance with standards.

It makes me wonder. How weird is it to say that there may have been concerns that the use of depleted uranium in weapons may cause harm? Weapons are intended to do do physical or mental harm, may it be in attack or defense.

If it is your company’s business to produce and sell weapons how can you even hope to be seen as ethical by starting a CSR program? You may strive to do less damage, but is that moral? At what amount of damage does being moral stop or start?

A spokesman for the Campaign Against Arms Trade thinks the whole thing is laughable. I agree and believe that one aspect of being moral is authentic. Producing weapons such as an Advanced Precision Kill Weapon System and worrying about causing harm with your weapons sounds contradictory to me. They simply can not be a product of the same value set; "our conscience is not impeded by our values to produce weapons, but we worry about the damage we do?".

Corporate social responsibility with BAE Systems sounds like load of crock to me.

Good authenticity, bad authenticity

There is a lot of talk on authentic brands. The word authenticity runs the same risk as quality. When we talk about quality, everyone implies GOOD quality. When authenticity is discussed, everyone implies that this is a good thing. But authenticity isn’t necessarily good. Nor does it mean good.

                     

If we start equaling brands to organizations I think there are a lot of authentic brands that perform well but aren’t necessarily good for us. I think of Al Qaeda, IRA, ETA, the mafia, street gangs etc.

These groups are authentic in the sense that they are true to their values. They have a strong culture and they have hangers-on who share their values. They would qualify as an authentic brand. However, it makes clear that being authentic doesn’t say anything about the intrinsic value of that authenticity. So authenticity by itself means nothing and neither does the term authentic brand.

Authenticity or marcom ploy?

I always enjoy the Mantra Brand blog even though I do not always agree with the author. Her post of January 10 is interesting. It is about Heroic Brands and it names some examples of companies that are or have heroic brands. I have some questions about that.

Why is a brand heroic if it takes into account the interest of others instead of just the organization? Why is that an act of heroism? Isn’t it an act of morality to consider how your actions influence other people’s interests? And since when is someone a hero when he or she is moral? Being moral should be normal and not an exception to the rule.

Corporate sustainable responsibility is the new factor in competition. Porter just wrote an article in HBR about it. The problem is that CSR – or being moral, as I see it – is seen as a tool to beat the competition. So how authentic is it to do well only as a means to a commercial and self serving end?

Mantra Brand gives some examples of brands that are heroic. One of them is Dove. I like the Dove commercials as they feature normal women, with everything that is beautiful and not ideal (at least to top model standards) about their bodies. But being responsible is more than a series of commercials with pear and apple shaped women with cellulite. According to Skin Deep the Dove products contain ingredients that may be harmful to people’s health. Check out the report. Apparently being responsible only goes skin deep.

Authenticity or short term indulgences

A news segment on TV yesterday talked about business outings and team building sessions as a means to show corporate social involvement. The idea behind it is that instead of a day out on the town or building rafts in the freezing cold, a group of people do something good, something socially involved. The segment showed a group of people from Orange painting and restoring parts of an elementary school. A very nice thought. The journalist even stated that Corporate Social Responsibility is already a common occurrence in organizations.

Well, I do not buy that. First of all I do not believe that CSR is as common as the voice over said it is. If that were the case there would be no fraud, employees would behave in an ethical manner, food manufacturers would not suggest that their food is healthy when it really isn’t. Laws would not have to be made if everyone behaved ethically and socially responsible. A stakeholder value approach would then prevail over the mere pursuit of shareholder value. That seems logical as an organization that prioritizes shareholder value, doesn’t prioritize the interests of other groups. Society is one of those groups.

Very often CSR is approached as only a PR or corporate communication instrument; “look at us being good and social”. This approach will backfire if not authentic. It may feel great to be a do-gooder one day, but if that is the total duration of such behaviour, it is not authentic. So organizations should do something that fits with what their being and stay away from things that are out of character.

A mail-order gone internet retailer was very keen on CSR,  so they supported the Ronald McDonald fund. At the same time the organization had a reputation – true or not – for stimulating sales on credit with consumers, resulting in people with financial problems. Instead of supporting some other organization’s CRS-project which in no way connects to the being of their own organization, they could have addressed the credit issue. They could have supported micro credit facilities for women in Africa or supported national organizations that help consumers with solving their debt, if they wanted to have something to show for. Or they could have lowered their interest rates or could have taken the decision not to target consumers that were already in debt with their organization.

In the case of Orange doubt if painting a school is what fits Orange's character most. Maybe they should start a good nutrition program in elementary schools and give away oranges. Or maybe they could look into the problem of teenagers in debt through high mobile phone bills. Whatever they chose, it should be fitting and it should be long term. One day indulgences, even if the walls would have been painted orange, do not authentic social responsibility make.