12 Dec. 2019 | Comments (0)
At a recent 3BL Forum on Brands Taking Stands, I was asked what I thought companies needed to do in order to prepare themselves for taking positions on matters of public policy. I responded with the following four Ps:
Purpose More and more companies are choosing to articulate a purpose or mission that goes beyond making a profit or simply satisfying shareholders. The recent Business Roundtable’s Statement of the Purpose of a Corporation, which articulates that companies share a fundamental commitment to all of their stakeholders—customers, employees, suppliers, communities and shareholders—was greeted with surprise or skepticism by some, but it really was just catching up to the way that many publicly-traded companies already operate.
The “north star” of this approach is the 75 year-old Johnson & Johnson Credo, which committed the company’s resources to patients, doctors, nurses, parents, employees, customers, business partners, communities, and stockholders long before anyone spoke of corporate social responsibility, and it became the guiding force for the company’s business success and good corporate citizenship.
Plan In order to get ahead of emotional or sudden responses to the trending issue of the day, companies need to develop a plan that takes into consideration the societal challenges that are most important and relevant to the company’s business, industry, and markets. Many companies have undertaken materiality or reputation risk assessments, which attempt to quantify stakeholder views on those social and environmental topics that should be most pressing for the company at a point in time.
Much has been written about the right way to go about this kind of assessment, but KPMG’s report, The Essentials of Materiality Assessment, is a good place to start. It outlines seven phases of a good materiality process:
- Defining what materiality means for your organization
- Identifying a long-list of potential topics
- Refining that list and clustering them into categories
- Gathering information about the impact and importance of each topic
- Prioritizing topics based on their strategic importance to the business
- Testing the results of this assessment with key internal stakeholders
- Seeking stakeholder feedback on the chosen material topics
Conducting and reporting on such an assessment will identify the issues that a company is most likely to be asked about in the public realm, and it also signals to stakeholders what topics a company is more likely to respond to in the future.
Process In addition to the processes required to define a purpose and a plan, companies need to develop a process for responding to requests from various stakeholders to take a stand on public policy issues as well as for determining when to be proactive with a current cause. Determining who the key decision-makers are, and what decision-making process they will follow when confronted with such a request will save valuable time, and it will also help ensure a consistency of approach, which adds an important level of integrity to such corporate actions.
Product Finally, determining in advance what kind of product the company is comfortable with producing on issues that are material to the business is an important step to being an effective advocate for a cause or issue. Should the company take the lead in getting other companies to sign a letter or petition or deliver public testimony or is simply signing such a letter and endorsing some other company’s advocacy the right approach? Should the company create a philanthropic or volunteer program that helps advocate for the cause? Is lobbying legislative groups or creating grassroots movements the way to go or is a quieter behind-the-scenes approach more effective?
The answers to these and other questions will depend on the culture of the company, the history of its commitment to a cause or issue, a decision on whether to be a leader or a follower on any particular issue, and the extent to which the company’s stakeholders are expecting the company to take an advocacy role.
By being strategic and approaching the question of a brand taking a stand in the same way that a company would approach other business decisions, it’s possible to avoid falling into the trap of responding to a request or a social media posting with an emotional response rather than a rational one. All it takes is a purpose, a plan, a process and a product.
This piece was orginally published by CSR Now!