by Shauneen Procter (@procter101) There’s an old saying that goes something like this: “You can’t make a silk purse out of a sow’s ear.”
In the world of branding and reputation, this idiom has never been more relevant, particularly when you figure out that the silk purse can be a metaphor for a company or product. No matter what you do, a wallet made of pig’s skin isn’t going to become silk.
In branding terms, this aphorism is translated into the understanding that the quickest way to hasten a bad product’s downfall is to advertise or promote it.
Is the converse true?
The intelligent question, of course, is whether the converse is true: Do good companies perform better than others, and what happens when you promote them properly?
Questions about the morality of business reached a head after the 2008 ‘Global Financial Crisis’ which saw a massive fiscal earthquake rip across the world, and fell the banking sector. The greatest financial ‘heart attack’ since the Great Depression of the ’20s, the crisis realised the death of Lehman Brothers and almost bankrupted Merrill Lynch, the Royal Bank of Scotland, Fannie Mae and many more.
There was a forerunner to this great crisis — its name was Enron. A Texas-based energy and commodities company, Enron was America’s darling before 2001. A US$101 billion empire until it floundered and fell in spectacular fashion, Enron’s demise had much to teach the world — if only the world had been willing to learn.
Distilled in a book
The take-out from Enron is distilled in a book called Building Public Trust: The Future of Corporate Reporting, which suggests a new way of public reporting — a communications model that puts transparency, integrity and accountability at its core. Written in 2002 by Robert G. Eccles and Samuel A. DiPiazza Jr., both of whom were at PricewaterhouseCoopers (PwC) at the time, the book suggests a new system of open information flow for companies.
Today you’ll find Eccles at The Harvard School of Business where he is the professor of management practice, while DiPiazza remains on the global board of PwC, holds other distinguished directorships and is involved as a trustee of a number of social impact initiatives.
In a world where public trust in big business and banking in particular has eroded significantly, Building Public Trust has never been more relevant. In it Eccles and DiPiazza propose a model of corporate reporting that transparently reveals information about key business indicators. The authors also say that companies must embrace technology for communicating openly.
A shift for brand builders
The system Eccles and DiPiazza proposed some 10 years ago indicate a shift for brand builders. In the wild west days of advertising — the opaque era of the ‘Mad Men’ — what the product was about didn’t matter. All that mattered was selling it. That’s why we balk today when we look at advertising of the ’50s which shows babies smoking and depicts misogyny.
Thankfully, the marketing sector has moved from selling at all costs to the understanding of building brands, protecting brands and, more recently, to creating real and enduring value. In a more connected and open world, consumers know the difference between silk and pig skin.
The future, then, is not about being smarter at selling but being smarter about producing or how business is done. It is about morality, sustainability and impact. Here the function of the brand and reputation manager changes from being a corporate protector to becoming a communication enabler. The new role is all about educating and coaching businesses about how to open their operations to public scrutiny.
Aphorism or scientific fact?
As Simon Anholt often says, “The only remaining superpower is public opinion”. In a hyper-connected world, consumers have much more power than they’ve ever had before, which means being good is its own reward. But is this just an aphorism, or a scientific fact?
Research shows that, while it may take a little more effort to be good, good companies do better than others. The brilliant duo from Freakonomics asked the question, “Is Good Corporate Citizenship Also Good for the Bottom Line?” in one of their radio shows last year. The answer from New York journalist and author Stephen J. Dubner, together with award-winning economist Steven D. Levitt, was a resounding “Yes!”
It comes as no surprise to find out that the Freakonomics show was based on new research by Eccles in tandem with a colleague of his from Harvard, and a top thinker on corporate sustainability at the London School of Business.
Very recent research
If that’s not enough to convince you, a research report by the Economist Intelligence Unit shows “global companies that have delivered strong share price growth over the past three years are more proactive on corporate sustainability issues than those that have seen their share price stagnate or decline.” There is also very recent research from Nielsen that shows consumers will pay more for products from ‘good businesses’.
In a Global Survey on Corporate Social Responsibility of 29,000 Internet respondents in 58 countries, Nielsen examined the relationship between consumers who say they’d pay more for products from socially responsible companies, and people who actually do. “[Forty three] percent of global respondents in Nielsen’s survey agreed they spent more on products and services from companies that have implemented programs to give back to society — just 7 percent fewer than said they’d be willing,” Nielsen says in this research.
The evidence for being good is overwhelmingly positive and encouraging, and hopefully heralds a new era for business and economics where industry becomes about more than just making a mere profit or growth.
The take-out for companies and brands? Make a better purse — it’s as simple, and as difficult, as that.
— Shauneen Procter is a founder member of Idea Engineers, a brand, advertising, social media and reputation management agency that engineers bespoke marketing solutions for companies in a complex, socially networked world. Procter is an advertising veteran who started her career at Grey Phillips in the ’80s. She was the founder of Sorcery Advertising, voted by clients as the “Best Local Advertising Agency”. A champion for sustainability, Procter is an investor in smart new businesses; a mentor to emerging brand talent; and an iconoclast who eschews awards but believes in building value and respect.
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