Brands: Do Good And Earn A Profit

Brands: Do Good And Earn A Profit

Few, if any of us, envision a business – a bank, a fast food chain, an oil and gas producer or even a retailer – when we hear the phrase “doing good”. Yet, brands today are doing good. Why are many people still uneasy with aligning a brand with the notion of doing good? And what can brands do about it?

Doing good.

For most people, this phrase conjures up images of kindness and self-sacrifice.  A young boy scout helping an old woman to cross the street.  A Peace Corp volunteer teaching a Nepalese man to build a smokeless stove.  An aid worker in Haiti rescuing a young child from the rubble.  Mother Theresa surrounded by young children in Calcutta.  The Red Cross, Doctors without Borders, CARE and other non-profit organizations may even come to mind.

Few, if any of us, envision a business – a bank, a fast food chain, an oil and gas producer or even a retailer – when we hear the phrase doing good.  Yet, brands today are doing good.

According to Giving USA and Charity Navigator, US corporations gave $16.76 billion to charities in 2013.  By the World Bank’s 2013 statistics, that’s more than the GDP of Iceland ($13.66 billion), Nicaragua ($10.51 billion), the West Bank and Gaza ($4.02 billion), Liberia ($1.77 billion), St. Kitts and Nevis ($0.75 billion) and many other countries.  And, Giving USA’s figures don’t include many corporate social responsibility initiatives and sustainability investments, which if added in would clearly make the number higher.

So, why are many people still uneasy with aligning a brand with the notion of doing good?  One argument that gained momentum since the Great Recession put a microscope on corporate greed: even though the number itself is large, corporate giving represents a very small percentage of corporate profits.  Less than 1.6% of the Fortune 500’s combined $1.080 trillion in profits—when compared alongside executive compensation, this tiny number is shocking.  The issue, however, runs deeper.  Our Western cultural narrative, derived from our Judeo-Christian roots, associates doing good with idealism and altruism.  Two concepts we typically don’t connect with corporations.

For decades, corporate efforts to fund social and environmental programs have been considered anything but idealistic or altruistic.  They’ve generally been judged as public relations campaigns designed to boost brand reputation at best and, at worst, a way to right wrongs.  They were seemingly part of a zero sum game in which companies’ positive efforts simply offset their negative behavior (negative behavior + positive response = zero sum) rather than create a net positive for society.

People want transparency from the brands they buy, especially the ones they trust the most.

Today, social media demands that doing good be more than part of a zero-sum game.  In fact, doing good is a practical reality for corporate survival across industries.  People expect nothing less.  They want transparency from the brands they buy – especially the ones they trust the most.  And more and more CEOs are acknowledging that fair and ethical business practices are as essential a criterion for lasting business success as is earning a profit.

In an era when businesses are forced to adapt to the challenges globalized sourcing, production and sales present, business leaders recognize that economics and ethics cannot be viewed as separate constructs.   Further, our technologically interconnected world where coopetiton (collaborative-competition), hybrid cars, mixed racial backgrounds and gay marriage are becoming mainstream concepts demands that the notions of idealism and realism no longer be at odds with one another.

Clearly, integrating sustainability and social responsibility initiatives into brand development must become more than a zero-sum game or self-promotion.  It must be recognized as one element of transparent communications enabling consumers to buy products from companies that invest into things they care about.

As technological advances and digital communications further alter the way we accomplish daily tasks, communicate with one another, produce and consume media, and live our lives overall, they are simultaneously shifting our cultural narrative.  Think about the impact of cutting and pasting, for example.  The fact that we can readily cut two seemingly different images and place them side-by-side has dramatically changed the way we see things fit together.  We mash-up how we dress, our playlists, books, videos, the list goes on.

The ability to cut and paste, and mash things up eliminates our need to choose between two seemingly opposite things.  We don’t need to pick between H&M and Chanel, flip flops and a suit, Beyoncé and Jimi Hendrix or even Brokeback Mountain and Back to the Future, for example.  Now we can comfortably express the inconsistencies in our personalities every day.  And as we grow more at ease with the notion of paradoxes living side-by-side, our cultural story need no longer emphasize choosing between two things.  Technology has conditioned us to expect that we have the right to have it all.

We don’t have to decide between seemingly opposite states: competition or collaboration; money or meaning; love or power; sustainability or prosperity.  Historical contrasts like these represent mind-sets at odds with the spirit of our times.  The digital age allows opposites to comfortably co-exist alongside one another and moves us beyond a world of either/or, into a new universe of also.

Three years of insight from Onesixtyfourth’s ongoing CultureQ research project brand investigating leadership, loyalty and good corporate citizenship in the UK and US, indicate that this cultural shift is leading to a new model for brands to simultaneously do good and earn a profit.   The core element of this model is the recognition and acceptance by businesses that they, too, are citizens, sharing the responsibility of progressing and sustaining the world alongside the consumers who buy their goods and services.

The model – called Brand Citizenship® – strategically aligns marketing, sustainability, corporate social responsibility (CSR), human resources and social media community building efforts under a united framework.  It enables brands to integrate sustainability and social initiatives into their development, without sacrificing the benefits they offer users or asking consumers to pay more.  Stretching development efforts across a Me-We paradigm, Brand Citizenship connects consumers, employees and other stakeholders to something bigger and more meaningful than themselves.

Beginning with offering quality products at a fair price, Brand Citizenship climbs up the benefit ladder to enhance its users lives, connect stakeholders with communities and issues they care about, sustain our planet and better our world.  Integrating initiatives traditionally managed at a corporate level with individual product and service brands and consumer priorities, Brand Citizenship helps democratize the traditionally more centralized concepts of sustainability and CSR in the same manner that social media liberated communications.

The processes of laddering up and integrating corporate silos will become increasingly important as social media continues to expose offensive business practices and as investors focus more on transparency of operations and the strength of a brand’s reputation.

Assimilating attributes of brand leadership, loyalty and good citizenship, Brand Citizenship helps to strengthen reputation, grow equity and increase return on investment of sustainability activities.  It is an integrated strategy that aids businesses to simultaneously earn a profit, sustain the environment and better society – co-creating a more positive future alongside people.  A win-win-win approach. Read more here

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