Trust: Why Business Lost It, And How To Win It Back (Part 3 of 3)

If business wants to regain the public’s trust, they’re going to have to be trustworthy, and employees are the key. Here are three basic steps to engage your employees, build social capital, and win stakeholder trust.

There’s a lot here, so take your time with it, read it in pieces, and as always, share your thoughts and insights.

Trust: “Can I get a loan?”

Many companies are turning to Corporate Social Responsibility as a strategy to win back the trust of their stakeholders and customers. But there is an irony here. For this strategy to work, it requires the very ingredient it seeks to generate – trust. Let’s consider exactly what a company is proclaiming when they use the phrase “Corporate Social Responsibility” (CSR).

CSR is a form of corporate self-regulation. Businesses promise to obey the law and maintain ethical standards in their activities. They are promising to promote the common good of the communities in which they operate, and proactively curtail any and all functions that may cause harm, whether specifically illegal or not. The popular maxim of People, Planet and Profit is the triple bottom line. Essentially, the company is taking responsibility for their actions and how they impact: a) the environment, b) consumers, c) employees, d) communities, e) various stakeholders, and f) the entire public sphere. It is a pretty significant commitment.

So, why in the world would I trust you with any of this ‘self-imposed’ regulation and prioritization if I don’t trust you in the first place? You cannot prove you are trustworthy by asking people to trust you even more.

If business wants to regain the public’s trust, they’re going to have to be trustworthy. But since they don’t possess enough trust capital in the first place, they’ll have to borrow it from somewhere. It would have been impossible for the financial institutions on Wall Street to generate the capital they needed to operate without an infusion of cash from the government. Similarly, corporations need a line of ‘trust’ credit in order to generate ‘intrinsic trust’.

In Part 2 of this series, Make your CSR believable? How? Create and Leverage Social Capital we made the connection between CSR, Social Capital and trust. Trust is the currency of social capital, and the bond that creates integrity/believability for CSR. But still, the conundrum remains – where to find the trust that CSR needs to increase trustworthiness? We hinted that the answer to this problem lies with the employees. Let’s discover how.

The Three Steps to restore Trust through a CSR strategy

Step 1: Make your CSR believable.

How? Create and Leverage Social Capital through your employees.

Any Corporate Social Responsibility strategy worth it’s salt will include an employee volunteering component (EVP). These EVPs are essential for creating credible CSR programs. Why? It is the employees that make CSR work inside and outside of the company. It doesn’t matter how much waste Wal-Mart reduces – if their managers are not treating employees ethically. And if Wal-Mart’s employees don’t believe in reducing waste during the workday, the company’s effort to reduce packaging material is essentially undermined.

Beyond making CSR strategies work, employees play the pivotal role of Community Ambassador. I recently sat with a Vice President of a major Canadian bank. She shrugged off her institutions efforts in CSR as ‘publicity stunts’. “Frankly, it’s pretty much an after-thought, with some poor guy running around the office trying to collect up all the good work and write a report.” If employees don’t believe their company’s advertising and CSR reports, they will actively undermine all marketing and promotional campaigns.

On the other hand, it is pretty damn hard to contradict employees who believe their company is making the world a better place. Starbucks does a pretty decent job of mobilizing their workforce as ambassadors of a global CSR strategy. (For an indepth look at this concept, check out the article ‘Employee Volunteering and Social Capital: Contributions to Corporate Social Responsibility ‘ by Judy N. Muthuri, Jeremy Moon, Dirk Matten).

Which brings us to the next step…

Step 2: Stop preaching the CSR message; start attracting CSR followers.

How? Use CSR as a social media platform, rather than a marketing tool.

The rise of CSR is inextricably linked to the sweeping popularity of social media. For an accurate and enjoyable synopsis of the major cultural shift social media has introduced, watch the following video:

In order for CSR to be trustworthy, it must have all the elements of transparency. The old media model of one message for the masses invokes exactly the opposite image. CSR thrives within the reciprocal dialogue of social media. But as a marketing tool, utilizing old methods of communication, it tends toward a surreptitious quality.

Social marketing, social media, and cause marketing are terms that we tend to confuse. (Laurie Hix of Brogan and Partners effectively explains these three concepts in a recent blog entry.) Simply put, CSR can use social marketing as part of an overall strategy to benefit the public. For example, promoting recycling or reducing energy use. CSR can also be part of a company’s cause marketing such as raising money and awareness for a specific issue. But social media is a big universe – in which CSR, cause marketing and social marketing all exist.

It would be a mistake to constrict your CSR strategy to fit the limited dimensions of social marketing or cause marketing. Doing this will leave you with a strategy that is distinctly artificial. You need to let it loose inside the universe of social media. Why?

Because CSR is all about trust.

And trust is the currency of Social Capital.

And Social Capital only exists within this model: reciprocal relationships with expected norms and exchanges of information and resources. Old media models deliver about as much reciprocity as the printed page. And in print alone, CSR is very much two dimensional.

So, produce CSR reports, but make them interactive. As Jonathan Ballantine notes in his article, “Building Trust in Corporate Responsibility” CSR is all about stakeholder engagement. Ballantine notes that “Dax Lovegrove of WWF believes committed organizations who genuinely engage in two-way communication with their stakeholders are ‘future proofing’ their business” (read the full article here So, open a twitter account and discuss ideas, accomplishments and opportunities for improvement. Above all, bring your employees in on the discussion. If your CSR is legitimate, and your communication/employee training process effective, you’ll gain an army of active followers to your CSR cause, rather than skeptical bystanders.

Step 3: Make your CSR effective.

How? Integrate your strategy with key business objectives, and measure the outcomes.

Many companies still treat their CSR activities as a kind of philanthropy. The idea of philanthropy is important, but it is only a part of CSR, not it’s entirety. CSR is a strategy that requires a management and reporting process. It is company-wide and should be fully integrated into all key areas of business. As I mentioned earlier, effective CSR involves stakeholders in the development of competitive products, processes and services that result in positive outcomes for people, planet and profit. But these outcomes are not only affected by what a company produces, but the manner in which it is produced. We’ve all hear the famous maxim by Marshall McLuhan ‘the medium is the message’. Well, in CSR terms, the process is the product. ( Seriously, write that down. Put it up on your wall. Make it your mantra.) If companies relegate CSR to an after-the-fact marketing strategy, or a philanthropic donation throughout the year, they’ve missed the point entirely.

To be a truly socially responsible company, how you do what you do is of utmost importance.

This brings me to one of my most irksome observations: the photo op employee volunteer event. They are well run, and fairly well attended, but offer little to the bottom line. If your employee volunteer program is focused solely on benefiting your community, you are probably wasting everyone’s time, including the communities. Like all CSR activities, employee volunteer programs should be designed to integrate with key business areas, such as HR. How? The best companies are tying the volunteer work of their employees to developmental goals. Then, they take the time to measure the success of these efforts in annual performance reviews. Others are using the opportunity to place young executives on nonprofit boards to increase their leadership competencies. Again, working with the nonprofits to measure the successes of these efforts is essential – and honestly, its just good business sense.

Companies can establish themselves as trustworthy if they do these three things:

  1. Outdo Wal-Mart. Utilize employees as key participants and promoters of the companies CSR practices. This will only work if the CSR is a genuine aspect of the companies culture. Hey, if Walmart is starting to figure it out…..
  2. Stop Speeching. Create a dialogue with customers and stakeholders about your CSR aspirations, achievements and failures. Transparency and reciprocity are the key here. If that’s not possible, I’m not sure why we’re even talking about restoring trust for your company. You need to be exploring the tactics of the Cold War.
  3. Remember: It’s all CSR, stupid. While CSR may be a department in your business, it is not a part of your business. Everything your company does, including everyone the company does business with is CSR. The process is the product.

Chris Jarvis
Senior Consultant, Realized Worth, Toronto, Canada1-317-371-4435
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