Sell the benefits, not the facts!

The answer to this particular question is something that many companies search for with great intensity these days. Could it be that the answer is to be found within the company walls, at the sales department? More specifically, within all that numerous sales course and training material that the sales people are continuously fed, alongside their daily sales work.

Allow me to clarify. In most sales training one message is often repeated again and again: the importance of not selling facts and specifications to the customer. What the customer is really interested to know, is what advantages and value to the customer a service or product has. Just think about how you make your own decisions to buy. When you buy something it’s probably not the specifications that really matters, but rather what you can do, experience and feel with the service or product.

Then why is it, that 80% of all businesses are content with simply describing their efforts within ​​sustainable development? Why are there so few companies that actually tell their stakeholders what the sustainability efforts really mean to the stakeholders, and their interest in the company or its offering?

Leslie Pascaud writes insightfully in her blog (freely quoted): “Consumers are tired of being nagged or told untruths [about the company's sustainability efforts]. They just want to go on with their lives, and if companies can offer attractive solutions to their needs that are more ethical and / or environmentally friendly, whilst at the same time offer good value, they buy. ”

This rings true in my ears, and unless I’m completely different from you, it probably rings true enough in yours as well. Thus, could it simply be that if a company instead of telling the customer all about what it does in the field of sustainable development, talks about what this means to the customer – in terms of benefits and values – the customer will also be more willing and pay for these investments?

I leave you to think about your answer to that question with another quote, this time by Marc Stoiber: “Think outside the box – how do external stakeholders perceive your efforts to become more sustainable? If these [efforts] are not clearly linked to the “bottom line”, or offers an improvement that consumers will appreciate, then you should not expect any support. “

The problem and implication of our current way of life is clear -It is unsustainable given current conditions. However, the question of why have we gotten to where we are has perhaps not been fully explored and answered yet.

What if we in our current efforts to save the planet are trying to alleviate symptoms rather than eliminating the disease? Has that idea ever crossed your mind? I recently viewed the documentary Zeitgeist Addendum and that film definitely raises questions that are worth discussing with your family, friends and colleges.

Why isn’t one possible cause behind the effect openly discussed in the current social debate around sustainable development – our monetary system?

(Click the image to enlarge)

Do yourself a favor and take two hours of your weekend and see the film, and while you’re at it, read the WWF report as well.

Corporate Social Media Communication is already a hygiene factor in marketing communication. Companies that have not yet taken necessary actions to manage their brands in the social media are exposing themselves to increased risk.

When it comes to CSR communication, social media is the buzz word. There are many tutorials online, marketing courses etc. to help you maximize your company’s profits and enhance your (CSR) communication.

In CSR communication, social media can be both a blessing and a curse for companies. For NGOs it is mostly a blessing. The old saying goes something along the lines that – when NGOs became aware of brand damage, it was like discovering dynamite. The impact that an NGO can have on a specific brand is immense, just study Greenpeace’s recent campaign against Nestlé. Great companies are already dealing with this new opportunity and threat.

Social media is an increasing part of brand management – acting fast when approached about key issues in CSR is vital. A positive example was Burger King’s direct announcement on Facebook, of their withdrawal from shares and purchases from Indonesian disreputable palm oil producer Sinar Mas.

Companies must act fast and decisive when confronted with its actions. The most important thing is to respond quickly, regardless if mistakes have been made or not. Even if the company’s dealings may have been legal, they may not be ethical – the customer is king and thus it must be their opinion in the topic that governs. It is when the company refuses to comply with the demands of the world that the brand becomes vulnerable. This is where social media has a role to play.

As Harvard Business Review puts it, social media is successful if it:

1. Narrates your work: Tell the public about what CSR efforts you are performing at the moment, what lies ahead, what your struggling with (if the goals are being met or just half way – showing that you are making an effort is half the battle). Also if you get questions about your efforts or actual complaints diligently address them and do not shy away from highlighting problems.

2. Asks questions: The power of the internet is to connect and share knowledge all over the world. There are a lot of answers to questions, if you need help with an issue, ask the question. Getting answers to questions before implementing a brand change ensures that there are no nasty surprises afterward.

3. Talks about social stuff: This does not necessarily relate to CSR as much, however it can be used to highlight say your company’s good work climate (healthy balance, community etc), naturally this is only successful if you are sincere. Otherwise it is as obvious as green-washing and may very well ensure you that the organization is highlighted in ways you did not intend – the material may very well become viral, but instead as a laughing joke.

Many brands tend to focus too much on creating and crafting exciting personalities and less on adding character to those personalities. Companies must fill their brand personalities with character rather than just repeating the same old tired phrases in new for(u)ms. This is especially true for CSR-issues.

Finally, it cannot be repeated often enough, social media communication has to be aligned with the company and its core vision, mission and overall corporate strategy.

… well just about everything if you believe in a market economy. Not so much so if you’re more into a planned one.When it comes to sustainability, as well as in many other areas, a major issue for a lot of industry sectors is government regulation. I’ve been to many seminars and events, where CEOs have stood before the audience and proclaimed the need of politicians to show the way into clean technology. This request seems to me, to be up the walls. Of course, I understand that CEOs want to know where to put the money. Wouldn’t you also like the lottery owner to tell you where the win is?

I believe in a market economy. And I thoroughly dislike everything that offsets it, whether it is a lack of information, bail outs, or subsidies. I’m also aware that our market economy is already offset. And that we need to continue with subsidies in some instances – at least for a while. However, this, to me, does not necessarily entail that we need to offset “new” markets as well.

What happens when we subsidize a technology? Theory and empirical studies tells us actors align their innovations to the subsidy.  History also shows that it is not always that the subsidized technology turned out to be all that great – with 20/20 hindsight of course – take ethanol fuel as a prime example.

What usually happens to the other competing technologies, researched on before the subsidy, after the subsidy? Well, usually they get shelved or scrapped. Might not one of these technologies have proven to be superior had the market been allowed to decide? We’ll never know.

Last week I had the privilege to see and hear US, four-time, president candidate Ralph Nader speak at the Stockholm University.

The theme of Mr. Nader’s talk was “Can we save the world by consumption? Young consumers as a change factor“.

Nader had a lot of interesting to say about how he viewed the current state of affairs, mainly in the US. He argued that – yes we can – save the world by consumption. Or at least, it is a good way to start trying to save the world.

As I summarized it, Ralph’s recipe for success was this:

1. Increase the general information to consumers. Teach consumers that it is not just about what you buy. It is also about what you choose not to buy. (Compare to the slogan – Reduce, Reuse, Recycle.)

2. Get (business) schools to teach young consumers about the realms outside our current economic paradigm. I.e. everything that the current economic model refers to as externalities. E.g. the environment, corporate crime, poverty etc.

3. Cure the economic actors of today from their current “teleopathy” (fixation on, rationalization of short-term goals – rather than focus on long-term effects). I.e. make everyone understand that it is more important to contribute to the quality of our economy rather than the quantity.

I like this last statement because it is intuitively appealing. Looking at the world, we do seem to to care more about quantity when we measure our success in life.

So, will we succeed in creating a one planet economy? Are we ready to give up quantity for quality?

Nader talked about the detrimental driving force of our economy. As he puts it – greed and power of the few dominating the many.

If our current economic system is driven by greed and power, some of this corporate greed and power must surely be an aggregation of greed and power within us humans. And if man values what she has got more than what she stands to earn (loss aversion) – some studies suggest that losses are twice as powerful, psychologically, as gains.

Then how will we go about transforming our current economy to a one planet economy? Will you be the first one to give something up? Will your nation be the first nation give something up?

A McKinsey study I read said something to the extent that, the world could reach the goal of not exceeding 450ppm of CO2 in the atmosphere by 2030. But, “the transition to a low carbon economy will inevitably create stranded assets and stranded people” (http://bit.ly/cLEcDX , p. 42).

I’m not sure how much I will want to give up. How much do we need to give up? And who needs to give up what?

These are fairly important questions we need to answer. And preferably answer them today, not tomorrow.

At a recent seminar in Stockholm Bo Edvardsson, professor and director CTF-Service Research Center, explained:

“Service is a perspective on value creation and customers define service on the basis of value-in-context and the resulting customer experiences. Value is co-created with customers and not linked to units of output.

Customers are resource integrators in the co-creation process. Operant resources operate on operand resources.

The co-creation process is formed by -in time and space linked and directed activities and interactions in which customers use their knowledge, skills and motivation to operate on a resource constellation provided in line with the value proposition.

From the Goods Dominant Logic (GDL) to The Service Dominant Logic (SDL)

1.GDL focuses on products and services attributes and SDL on value-in-use as defined and experienced by customers. Customers are users/consumers. Value is destroyed when products and services are used

2. In SDL value is created and defined by customers and in GDL product related and provider defined. Customers create value, they do not destroy value”

In SDL value is created and defined by customers.

I believe the concept of SDL, which is a great concept indeed, could be (and should be) enriched by replacing the focus on co-creation with customers. To co-creation with Stakeholders.

By replacing customers with stakeholders, this new logic will create more value not only for the people in the short term. But also for the planet and therefor also for the people in the long term.

There is in general, as I perceive it, a real opportunity for all the great minds in our world, helping us to generate more value for ourselves, to introduce the parameter of Planet into the current mix of People and Profit in their thinking processes.

What is your opinion?

Learn more about the Service Dominant Logic here

Many companies I encounter speak about how they want to integrate CSR into their everyday business practices. This is of course excellent. But the same companies rarely know what it takes to successfully integrate CSR into their organization.

My experience is that the major reason for many companies new found quest for integrated CSR does not stem from a thorough understanding of the issue. Rather, business leaders see integrated CSR as the most inexpensive way of implementing CSR.

The apparent financial upside for any CEO is that integrated CSR, at face value, implies that the company does not have to commit the extra resources a separate internal CSR organization requires.

This conclusion is correct. But what many CEO:s seem to overlook is the analysis of how to achieve successful integration.

If a company wants to be successful in integrating CSR it must follow certain steps:

Strategy formulation:

Based on a thorough analysis, define and anchor what CSR means to the company. Formulate a clear strategic goal for CSR and identify critical success factors.

Strategy execution:

1. Make sure everyone has a good understanding of what decisions and actions they are responsible for.

2. Provide adequate decision rights (power and money) for given responsibilities.

3. Create motivators (incitements, measurements and targets) that motivate people to do what is needed within the desired time frame.

4. Make sure that the different motivators do not create internal conflicts. And establish effective vertical and lateral information flows throughout the organization.

If you want to learn more about the secrets of successful strategy execution. I recommend reading this article publicized in Harvard Business Review in June of 2008.

Daniel Roberts has written a great and interesting blog post on the issue of whether or not the Global Reporting Initiative should be open for use to companies that sell hazardous products. You can read it here “8.1 people killed per 1 employee – not your usual CSR KPI“.

His opinion is quote “…I think the GRI should be embarrassed that their standard can be used to greenwash companies that deal in death.”

However, I think that it might be to patronize readers of GRI reports, to say that a tobacco company (Imperial Tobacco) can use GRI as means of greenwash.

To the contrary, I think it is great that also companies with hazardous products start utilizing the GRI for reporting. This puts pressure on the industry.

As we speak there are people working on industry supplements to the GRI framework. One of these days there will be a supplement for the tobacco industry, the arms industry and so forth. Maybe “people killed per employee” will be one of the performance indicators within the Product Responsibility protocol?

Transparency is a good thing. Just because GRI, at the moment, does not shine light on wrongs within a specific industry, doesn’t mean it will not in the future.

And companies that has begun reporting according GRI will need good explanations to stop when the KPI’s become inconvenient.

I say, welcome to the GRI Imperial Tobacco.

As part of the development of a new product (a web based management and reporting system), I’ve been on a tour visiting numerous of sustainability/CSR managers at large Swedish based companies. The purpose of this exercise is to have the planned final users of the product give their input on what to develop further, in order to maximize the value of the finished release. The response so far has been great which provides a lot of positive energy to everybody involved in the project.

One of the managers I met raised one challenging question though. She asked me if a separate CSR management system wouldn’t be detrimental to the integration of CSR into the daily operations (i.e. a separate management system indirectly indicates that CSR is an appendix to the core business). The answer to this question is somewhat complex. I believe that if an organization considers CSR to be truly vital to business success, then it will already have integrated the different perspectives of CSR (business ethics, economic-, social- and environmental responsibility) into their current business management system.

However, my experience is that most organizations are not yet ready to integrate the different perspectives of CSR into their current business management system. CSR is not yet considered important enough when push comes to shove. This as a result of the difficulty in proving the connection between CSR initiatives and increased profitability (a challenge already discussed in an earlier blog post).

If there is a low CSR ‘maturity level’ in an organization, then I believe that a separate CSR management system, that help secure that every sustainability initiative launched supports the company in achieving its overall mission statement, does further the integration of sustainability into the core business. Such a system will namely support the CSR manager in identifying and proving the business value of the CSR effort to the chief executive team. This will in turn, within time, give CSR a place in the ‘traditional’ business management system.

A Couple of days ago I was asked to give some feedback to a friend’s blog post on talent management and sustainability. As I contemplated what he had written I remembered an interesting article (Swedish) I read a couple of month ago.

The article covered students at Sweden’s most well renowned business college (SSE). The authors of the article had somehow measured the business students views on the importance of CSR when evaluating potential post grad employments. The conclusion was that in general students today look just as much at potential employers CSR efforts, as at their compensation and benefit structures. Interesting as that fact ought to be for a lot of HR-managers, it was not what struck me as most fascinating about the article.

Lately, during the recent/current recession, we have been bombarded with head lines about “immoral” bonuses. These bonuses were/are payed out to executives in traditional business sectors, such as banking etc.

Reading the findings quoted in the previously mentioned article, it apparently was clear that students within the traditional orientations, accounting and finance, payed less attention to CSR opposed to students within general management, marketing and international business orientations. Further the article mentioned that when representatives from banks and accounting firms come to visit the school, as part of their talent attraction strategy, they seldom emphasize CSR aspects of their organizations in their presentations to the students. Also the article went on to mention that the students at SSE at the time (November 2008) only had the possibility to choose two subjects covering CSR issues.

It is probably fairly certain that if the academia does not provide business students with a deep understanding of business ethics when training them for a life in business. The students will likely not actively reflect over the issue very much later in their professional careers. This is something that has been a hot topic among the articles in the Harvard Business Review past year. Looking back in history this might explain why today, within the banking sector, we see a culture that apparently has very few issues with handing out huge bonuses to executives even though the rest of the world finds them out of order.

The effects of this behaviour are clear in the latest Edelman report: “Banks went from being one of the most-trusted sectors before the recession to near the bottom of the list, declining from 71 percent in 2008 to 33 percent.”

During last Friday afternoon, a couple of people at the office were for a moment occupied by an animation of a spinning female silhouette . They were fascinated by the fact that she appeared to be spinning in different directions depending on who you asked. The explanation for this phenomena was spelled out under the animation. If your left brain hemisphere is dominant the woman appears spinning counter-clockwise and vice versa. As you may know, your left brain handles your “logical” skills and your right dominates your “creative” skills (roughly of course). View the table below:

This got me thinking about another perspective of the entire compensation and benefits debate. Could there, besides the culture issue, and now I’m really out there speculating without any grounds what so ever, be a connection between questionable incentive structures and left brain hemisphere dominance among the people creating these incentive structures? The thing that strikes me as most fascinating with the bonuses are not the size of them (even though they are mindbogglingly large at times) but rather that they keep handing them out and seem surprised at the negative reactions it creates in society. It is as if they do not seem to be aware of the world around them.

Getting back to left and right brain dominance thing. Comparing the functions of the left and right brain hemispheres (table above) you see traits of the left such as: logic, detail oriented and facts rule. Compare this to traits of the right: emotions, “big picture” oriented and imagination. Do you see where I’m getting at? The explanation for these incentive structures is of course is that it is absolutely necessary to hand out huge bonuses, in order to retain top talent  within the particular industry sector (detail oriented?). Maybe that is so and then we are back in questioning the health of the culture I guess.

Anyhow I think it would be a interesting research project for e.g. cognitive scientists. How about you?

Another easier way of avoiding losing trust in your brand, than analysing the brain dominance of the creators of your company’s comp & ben structure, is to have a working strategic dialogue with all your stakeholders. To learn more about how these work you are very welcome to contact this company.

Please! Feel free to give correct me on anything that is faulty in this blog.