Diana Marszalek 23 Jan 2020 // 6:51PM GMT
DAVOS — Companies that claim to be purpose-driven but don’t take action in line with their purpose statements are at risk of alienating rather than engaging stakeholders, according to communications leaders at the World Economic Forum this week.
Weber Shandwick chairman Jack Leslie said businesses and their comms teams are at a “really serious moment” where they “don’t have a lot of margin for error,” as trust in capitalism and institutions continues to decline, according to the latest Edelman Trust Barometer.
He added: “The risk is a gap between the purpose that you articulate and what actions you actually take. And if that gap is very wide, then you’re in trouble.”
Leslie was speaking at a Holmes Report panel with Weber Shandwick and global technology firm Wipro, entitled “From Values to Action: Brand Purpose as a Reputation Driver.”
Also on the panel were Beatriz Perez, the Coca-Cola Company’s chief communications, public affairs, sustainability and marketing assets officer; Boston Consulting Group managing director & senior partner Miki Tsusaka; and VMware chief communications officer Joan Stone.
Panelists took a far-reaching look at the range of issues and challenges brands may encounter in addressing the concerns of multiple stakeholder groups — proving commitment, balancing interests, wisely choosing which issues to engage in and prioritizing which one of them to address first among them.
Without strategizing in those areas, and allowing stakeholders in on the process, companies risk losing buy-in from essential groups and credibility, they said. The benefits of advancing change, however, outweigh the risks of inaction. And those risks can range from investment without ROI, to alienating particular groups.
"There is always risk management, there is always risk mitigation. But (VMware is) seeing and knowing that the more we do to drive positive societal impact is going to help us grow not just from a shareholder perspective but from an employee base...from an awareness perspective," Stone said. "The more we do for sustainability, or around D&I, is going to give us more awareness from a communications standpoint so there is goodness as well in that."
Said Perez: "It's really about growth because this is what people want. And if they are going to purchase our brands, if they are going to support our company, then we have to make sure we are understanding how we are actually delivering on what they want. And that actually presents an opportunity for business."
The panel agreed, however, that companies and CEOs taking a stand on too many issues, or speaking out on areas that were not relevant to the business, could harm rather than enhance their reputation.
Leslie said: “It needs to be rooted in personal values, it needs to be authentic and you need to be judicious. CEOs are not politicians; I worry they could find themselves getting in too deep.”
Perez pointed out that while Coca-Cola had committed to work on its use of plastics, it first had to deal with another area of public criticism: reducing sugar levels in its drinks to deal with the obesity crisis.
“We learned that unless we dealt with the portfolio first, sugar reduction and ingredients, then people felt we weren’t paying attention to what we needed to,” she said. “No one is going to care about other issues until we fix this.”
The beverage giant has created means for employees to be part of the process of developing an agenda around corporate purpose, and solutions for addressing it. That can be as meaningful as providing incentives for taking action, she said. “It really does start with the leadership and finding a way for employees to weigh in and have a way to participate,” she said.
Tsusaka pointed out that articulating corporate purpose was not just about communicating with external stakeholders: “Purpose is not just external. It’s also about how employees feel.”
It’s also about validating that intent with action, which can impact many facets of business, including the bottomline, she said. “I do thinking sticking with it is really important. It can be measured,” she said.
Stone agreed, saying purpose was becoming increasingly important in recruiting and retaining talent, as younger generations in particular were less likely to join a company whose values didn’t resonate with them. “It’s about business growth. We have to make sure we understand how we deliver on what they want,” she said.
All of which is based on communicating their purpose and values clearly and concisely so employees know exactly where their companies stand and if they want to be part of it. “They are not going to join your company if that page doesn’t resonate with them,” Stone said.
Leslie said doing so is increasingly important at a time when people are looking for order and purpose amid widespread instability.
“They are actually starting to look at places of work as safe harbors for civility. It puts a special responsibility on us to create an environment where these folks really feel they have a voice, that we’re listening and that we can have civil conversations.”