As we did at the beginning of last year, we share our forecasts for key trends in 2015, examine the challenges that these present for business, and anticipate how organizations are likely to respond. This year, we asked four of our Directors – Femke de Man, Caroline Holme, James Morris and Eric Whan – to focus on a single trend they foresee manifesting in 2015. These themes were examined more fully in our January 15 webinar.
Reputation: The Inner Game
By Femke de Man, Director | Read Bio | Follow on Twitter
In 2014, we learned that public trust in global companies has fallen to its lowest point since we began tracking this in 2001 (see graphic below). Stakeholder demands are increasing and are amplified by social media, and employees and consumers, especially millennials, have a different set of expectations for what ‘good’ business looks like.
In this challenging context, we ask ourselves the question: how can companies foster greater trust and enhance their reputations? One requirement is, or course, to regularly assess stakeholder expectations and ensure that these are being responded to effectively – be it via communications, initiatives, policies or engagement strategies. Fostering a greater understanding of and affinity with key audiences can only serve to create more value from these relationships. However, even the very best measurement and analysis of the external context, supported by insightful strategic advice on corporate response, only gets you so far without one critical element: internal alignment.
As societal and stakeholder demands grow in complexity and frequency, the need to manage and enhance reputation becomes an increasing value driver for companies. And while there is limited control on how stakeholders will react to corporate actions – will they respond favourably to a new communications campaign? Will they be more likely to buy, advocate, or support in other ways as a result of a new set of initiatives launched by the company? – being firmly aligned internally is within complete control of the company.
We believe this ‘inner game’ is an important contributor to the success certain companies have achieved in the area of reputation of late. Leading companies understand that building trust among stakeholders is most effective and valuable when it is an enterprise-wide effort – a “responsibility for reputation” that runs across all functions, hierarchies, and geographies of the organization (see graphic below from our reputation best practice brief).
Alignment is only achieved through rigorous internal engagement. By effectively engaging colleagues across the enterprise around reputation, from head office to the business units, and involving them early on in the process, companies are extending “ownership” of the organization’s reputation and the buy-in to reputation happens right from the start. Reputation insights via research and stakeholder feedback helps enormously in building this buy-in. And including reputation facets as part of the KPIs of key functions across the organization, and ensuring the reputation strategy is aligned with business goals and corporate strategies, truly gives traction to the exercise.
This shift toward internal alignment – in other words, the building of a “reputation-centric culture” – is slowly being manifested by top organizations and is something we expect will continue to develop in 2015 and beyond.
This idea of an integrated and aligned approach was explored in our brief “Building Resilient Corporate Reputations”. Download a copy of your own here.
Transparency: The Currency of Leadership
By Caroline Holme, Director | Read Bio | Follow on Twitter
Over the past year we’ve seen ever rising expectations of corporate transparency. GlobeScan’s Radar research shows openness and honesty is the strongest driver of societal trust in business – but is the lowest rated area of company performance. My colleague Peter Paul van de Wijs expanded on this in his recent blog. And many of the leaders interviewed in our series of GlobeScan Dialogues (including executives from Nestlé, GSK and Vodafone) highlighted stakeholder demands for greater visibility, transparency and proactive disclosure.
The three forces driving this change were nicely summarised in the Economist right at the end of last year: government demand for greater corporate accountability; pressure from investigative journalism; and growing sophistication of NGOs, such as Transparency International. And there is increasing recognition of the benefits of transparency, such as enhanced reputation, greater talent equity and improved sustainability performance.
I think it is clear that Starbucks CEO Howard Schultz’s message that the ‘currency of leadership is truth and transparency’ will resonate throughout 2015. The results of our annual State of Sustainable Business survey with BSR show that there is still enormous potential for business to improve transparency.
In our own work, we see stakeholder intelligence and engagement as an enabler and driver of transparency. We are increasingly helping companies and organisations to reflect back to stakeholders what they have heard from them and invite their further involvement in pursuing mutual interests. This sets in motion a circle of feedback and responsiveness. Feedback and engagement can take many different forms – from reports, to roundtable discussions to convenings to online mass collaboration forums.
Companies don’t really have a choice about whether to be transparent. But 2015 will be the year that more of them figure out how to use this valuable currency.
“Biggering” with Purpose
By James Morris, Director | Read Bio | Follow on Twitter
In 2014, we thought a lot about corporate purpose at GlobeScan and in recently reading Dr. Seuss’ The Lorax for the first time to my three year old daughter it struck me as also being a perfect parable for a company’s need for a corporate purpose, beyond just making money. After a quick search of “Lorax” and “Corporate Purpose” I find I am, of course, not the only person ever to think about this!
Last year, we helped a number of clients understand stakeholder expectations of their own purpose, and how to best articulate it. In predicting what might happen in 2015 and beyond, we feel fairly confident that more and more companies will seek to demonstrate and unite around a clear corporate purpose. Indeed, as Gianpiero Petriglieri wrote in HBR recently, we may be experiencing a collective ‘crisis of purpose’.
There is no single agreed definition of what a corporate purpose is or isn’t. For our thinking, we see it being a stated vision aligning everyone in the company to a common purpose of why the company exists and what value it generates.
The “value” part is key. The argument that the sole purpose of a business is simply the “biggering” of profits – to quote the Once-ler – is becoming a thing of the past for many leading companies.
Clearly articulating what a company is here to do and what value it brings to society is something that stakeholders are increasingly demanding, especially in our post-recession world where trust in business remains low, as Caroline Holme explored in her 2014 review.
In 2015, we expect that companies will continue to articulate the value they bring to society, and most importantly that it is beyond a list of sustainability goals. In fact a corporate purpose that only deals with sustainability, or is only mentioned in a sustainability report or on a corporate sustainability website is not a corporate purpose at all.
To be a true corporate purpose, it must define what success is for the business, and yes, that should include a sense of how “biggering” of profits will happen. Without it, it’s just another hollow phrase that stakeholders will easily see through.
A Climate of Aspirations
By Eric Whan, Director | Read Bio | Follow on Twitter
2015 is expected to be the make-or-break year during which the world aspires to a UN climate change plan that delivers results. We are optimistic about the “plan” part. As far as the “results” part, not so much.
In its own musings on what to expect in 2015, my national newspaper’s editorial team quipped that “the Earth’s climate [is] changing faster than attitudes about climate change.” Again, we agree on the first part, but not the second. GlobeScan’s 2014 Radar polling, and that for National Geographic, showed that people the world over observed a decreased sense of urgency about climate change among major societal actors, while they themselves became increasingly anxious about it. My colleague, Tove Malmqvist, recently wrote about this phenomenon for GreenBiz.com. Greater numbers now expect detrimental impacts on their own lives. And, trust in climate science is way up. The world is looking for leadership.
Based on this apparent mobilization of political will (witness the US-China accord as early evidence), but tempered by the historic inability of the UN process to achieve results, we expect Paris to deliver only a little more than the usual. Lima was just another step toward the weak, opt-in emptiness that lowest-common-denominator systems seem to always result in. But a small step forward nonetheless.
Which means that climate leadership will continue to fall to big business in 2015, as it has for the past several years. Expect more collaboration between business and international NGOs as well.
But we expect the demand-side business case for corporate climate action to become even clearer in 2015. GlobeScan’s and BBMG’s 2012 Aspirationals market framework, in which more than one-third of consumers in six major markets were shown to unite social, environmental and materialistic motives, was just the beginning. In 2013, we proved the point across 20 countries, and in 2014 we demonstrated that this is no fleeting phenomenon.
Early in 2015, GlobeScan’s Radar will once again identify and profile the Aspirationals segment, including their disposition toward climate change, to enable companies to synch up with this market-based driver of innovation and differentiation. And within a few more global companies, the CMOs and CSOs will find ambitious common ground while the parties at COP 21 underwhelm. 2015 will see sales and sustainability merge yet some more.