Lead and inspire:A new age of corporate citizenship

Interbrand | Pg. 2

Lead and inspire:A new age of corporate citizenship

Sustainability, zero net impact, carbon neutral, carbon offsets, re-forestation, super funds, Environmental Protection Agency punitive policy mandates, zero tolerance, infrastructure rebuilding and energy efficiency: When it comes to corporate citizenship, the language and the mentality of the corporation (large and small, national and global) is to do nothing more than is regulated, legislated and mandated in order to be a good corporate member of society. How utterly uninspired and irrelevant can a movement be?

Corporations, employees and shareholders have been lulled into the belief that doing enough is not an invitation to do more. Annual CSR Reports are a testament to the level of commitment that corporations are willing to make to fly the flag of responsibility. Neutral and lackluster efforts are well documented and cast in a favorable light, but where is the innovation? Where is the positive contribution? Where is the leadership? Where is the optimism? Where is the inspired light that ignites a new age of corporate citizenship?

It is obligatory that corporations begin demonstrating and communicating a stronger commitment to corporate citizenship in order to satisfy the demands of employees, shareholders and partners. Studies on millennials and The Buck Consulting study, “The Greening of the American Workforce,” which explore the impact of corporate citizenship on attracting and retaining the best talent, are evidence of this. While these reports don’t expose anything earth shattering, they drive home the point that inaction will push the workforce into an impregnable state of management cynicism and mistrust. They make it clear that gaining the trust of the employee is very high on the priorities list, especially as the economy improves and the best and the brightest begin seeking “greener” pastures where their personal values align with corporate values.

Today’s corporations face a stark choice in these increasingly transparent times: Develop and implement strategies to carve out a meaningful presence as a corporate citizen in a world, or run the risk of seeing your brand value erode and your business

suffer. This means going beyond legacy initiatives like pet causes, the arts and emotional investments and instead investing in strategic efforts that impact business, reputation and connection with employees.

A new paradigmCorporate citizenship, as defined by Interbrand, is the sum total of how a company treats every entity that depends upon it and how it treats every entity upon which it is dependent. This includes its employees, customers and suppliers. Also included are the government(s) responsible for both regulating and assisting it, the communities in which it does business, and the larger environment it shares with the whole planet.

This definition elevates corporate citizenship to a lever of brand value that impacts a company’s positive contribution to society based on the way it treats the core elements of its business. In that sense, the corporation is just like a global citizen. Like a vital member of a community, it is a part of multiple, covalent and interlocking processes, whose actions effect and are

by Tom Zara

Lead and inspire: A new age of corporate citizenship Interbrand | Pg. 3

impacted by all it touches. So, while doing good for the sake of a PR bump or to keep the regulator at bay was the hallmark of corporate citizenship in the recent past, the new equation is this: doing good plus doing it strategically yields better brand value.

Proprietary international researchInterbrand and Hall & Partners sought to understand the role that corporate citizenship plays in driving decisions for both consumers (end users) and corporate purchasers (B-to-B users). Our quantitative research sample was robust: Over 5,200 consumers between 18–65 with a role in purchase decision-making, and 1,861 corporate purchasers across small, medium and enterprise businesses, spanning six geographies from the U.S. and Europe to China, Japan and Brazil. All tolled, ten industry categories were examined.

We used regression analysis that compared the role played by several industry-specific drivers in stakeholder behavior. In the case of each industry, we were, in effect, pitting corporate citizenship drivers (the way a company treats its workforce, whether it offers environmentally responsible products and whether it provides support for nonprofit organizations) against traditional category types of drivers (convenience, pricing and service). Our goal was to gauge the role that is played by corporate citizenship drivers relative to motivating factors, which we broke down into four types of stakeholder behaviors: brand favorability (overall impression, brand choice and intention to purchase), brand commitment (level of loyalty) and brand advocacy (likelihood of talking to others

positively about a brand). (For a full account of the study, please contact Interbrand’s corporate citizenship team.)

Building a corporate citizenship strategyOur data suggests several clear implications for corporate strategy. First, when it comes to the six constituents of corporate citizenship, a concentrated effort in one area rather than a scattershot effort will yield a greater return on investment.

Second, it is essential to determine where corporate citizenship makes the greatest impact in the customer journey as it determines the focus of the corporate citizenship budget. We found that corporate citizenship makes the biggest positive impression when it is tied to social engagement, not purchase choice. Therefore, it is crucial to focus one’s corporate citizenship spend on how people engage rather than how they buy.

Third, choosing a corporate citizenship approach that fundamentally relates to your business will be to your benefit. That’s because two will be mutually reinforcing. For example, a financial sector entity might be advised to support micro-lending in the developing world than AIDS research, while an energy company would do well to focus on R&D for sustainable energy sources rather than a cure for cancer. The stories that capture the initiatives of doing good and also dovetail with the larger brand become the most clear and compelling.

When crafting a strategy that will allow you to fulfill your brand promise through corporate citizenship, the seven following steps should be considered:

1. Brand Strategy: Your brand strategy is essential in determining your citizenship strategy. The two must align, so ensure that your brand strategy is clearly defined.

2. Citizenship Audit: Undertake an exhaustive review of your company’s current corporate citizenship initiatives.

3. Competitive Citizenship Benchmarking: This is basically a competitive field audit; examine the corporate citizenship initiatives of your key competitors.

4. Stakeholder Citizenship Expectations: Understand what key stakeholders expect of your company in the realm of corporate citizenship; use whatever research methods are appropriate to glean the answer to this question.

5. Citizenship Driver Analysis: Use an analytic process to determine the most powerful drivers of your corporate citizenship.

6. Citizenship Strategy: Compare your brand identity directly to your citizenship drivers to determine the most relevant, impactful ways to proceed.

7. Citizenship Activation Plan: Explore the most appropriate methods for bringing your citizenship strategy to life and — crucially — expressing it and broadcasting it to your key stakeholders.

The moment is fluid when it comes to corporations’ ideas around social engagement. Increasingly, the field is full of firms using some form of corporate citizenship to vie for differentiation and prominence, but as Santiago Gowland, Vice President, Brand and Global Corporate Social

Your brand strategy is essential in determining your citizenship strategy. The two must align, so ensure that your brand strategy is clearly defined.

Responsibility for Unilever makes clear, “The winners will be those that are perceived as catalysts within their industry and in the lives of their customers.”

To ensure that your brand leads rather than fails, you need a corporate citizenship strategy that aligns with your brand, a tight focus on one of the seven key constituents outlined above and a strong, and a targeted method for broadcasting engagement to motivate behavioral change. These three components, in that order, are what will set your brand apart from the competition.■

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Creating and managing brand valueTMinterbrand.com

Tom Zara

Tom is the Executive Director of Strategy at Interbrand New York. He is responsible for the management of brand strategy, corporate identity programs, name changes and launch communications.