iscover
Consumers are more savvy, more engaged, more connected, and (likely) more critical than ever before. When words fail business leaders, silence might seem like the safer option – but think again.
When Michael Jordan, former professional athlete and footwear mogul, was asked why he refused to endorse a Democratic candidate in a 1990 Senate race, he reportedly answered: “Republicans buy sneakers, too.”
Though Mr Jordan reportedly suffered some reputational damage over the incident, his star was mostly unscathed. Now, it seems, the costs of staying silent in business are high and getting higher.
As noted by Daniel Korschun, associate professor of marketing at Drexel University: “Consumers today form relationships with a company based not only on the quality of the products and services it sells but also on a set of expectations of how it should comport itself.”
Dr Korschun’s research found that the fears of speaking up as a corporation are “misplaced”. Rather, “the opposite may be true: it may be more dangerous to remain silent than to take a political stand”.
When day after day, organisations were being outed for “greenwashing” and the like, it seemed many replaced making hollow, unsubstantiated commitments with a decision to stay silent. It wasn’t long before these “greenhushers”, too, were exposed. The days of “shut up and make the Oreos” could well be behind us.
Recently, we spoke with the chief executive of Structured Innovation, Paul Edginton, about the importance of investing in a company culture. Both internally (among employees) and externally (as a public-conscious company).
What kinds of issues?
“Organisations or anyone in a leadership role who suggests that we should not be making value statements or purpose statements because there’s a potential liability should be fired,” said Mr Edington. “They should not be in a leadership position.”
It’s unreasonable to expect organisations to take a public stance on every issue making headlines, but leaders should be prepared to state, and defend, the ethical principles that drive their decision-making processes.
Moreover, according to the Edelman Trust Barometer, 53 per cent of consumers believe that every brand has a responsibility to get involved in at least one social issue that does not directly impact its business.
Silence is not enough, but neither are words
When asked where Mr Edginton fell on the debate over staying silent versus speaking up, Mr Edginton said speaking up is not enough.
“I think not only should companies be making value and purpose statements from the board level, but they should also be measuring alignment with those things. They should be measuring adherence to those things and asking for regular reporting on adherence to those things,” he explained.
In other words, organisations should not only be making firm commitments to their espoused values, but they must also be acting on them in a demonstrable, measurable way.
“If you make those value statements and you measure your adherence to those things, then brand washing or virtue signalling is not an issue because you are checking that you are delivering on them,” said Mr Edginton
Aim high
According to Mr Edginton, when it comes to company values, it’s better to aim high and fall short than to not try at all. So long as you’re tracking performance against a certain standard, then if an organisation falls short, it can point to those standards and say what went wrong.
“People, and Australians, whether you’re an employee, a shareholder, a politician, we accept that people don’t always deliver and can make mistakes – so long as those mistakes are identified, it’s acknowledged, and you make a commitment to doing something about it,” he said.
According to leadership consultant Anne Loehr, there are six steps to take in defining organisational values. They are:
- Assess your current organisational culture.
- Review your strategic business plan.
- Determine the culture needed to achieve your plan.
- Decide if your values need to shift.
- Define what your chosen values really mean.
- Incorporate these values into organisational processes.
“A solid foundation of values for your organisation,” said Ms Loehr, “will not only help you hire the right people but also build an organisational culture that’s engaging, genuine and, most of all, impactful”.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
