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THE AUTHENTIC ENTERPRISE Relationships, Values and the Evolution of Corporate Communications

Roger BoltonAPCO Worldwide

Arthur W. Page Society Beijing, ChinaNovember 13, 2008

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“All business in a democratic society begins with public permission and exists by public approval.”

“All business in a democratic society begins with public permission and exists by public approval.”

ARTHUR W. PAGE

• VP PR of AT&T, ’27 – ’46• Corporate officer

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THE WORLD IS CHANGING

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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THE WORLD IS CHANGING

Rapidly changing context for global business

At stake:

Ability to manage relationships

Competition over identity

DRIVERS OF CHANGE

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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DRIVERS OF CHANGE

Stakeholder Empowerment

Globalization

DigitalNetwork

Revolution

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GLOBALIZATIONInternational Corporation

Multinational Corporation

Globally Integrated Enterprise

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GLOBALIZATION

The “Flat World” is reshaping the corporation.

Shifting from hierarchical, monolithic, multinational …

… to horizontal, networked and globally integrated.

Operations are componentized, virtualized and distributed over an ecosystem of business relationships.

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THE DIGITAL NETWORK REVOLUTION

Web 2.0

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108 million blogs, increasing by 175,000 daily

Nearly one billion camera phones worldwide

Second Life – 14 million people, 80 countries

YouTube – 100 million videos/day

THE DIGITAL NETWORK REVOLUTION

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STAKEHOLDER EMPOWERMENT

Common interests

Expertise

Access to information

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STAKEHOLDER EMPOWERMENT

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Me Acad. Doc NGO CEO Blog

U.S. Credible SpokespersonsEdelman Trust Barometer 2008

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STAKEHOLDER EMPOWERMENT

COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CONSUMERS

LOCALCOMMUNITY

NGOs

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STAKEHOLDER EMPOWERMENT

COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CONSUMERS

LOCALCOMMUNITY

NGOs

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DRIVERS OF CHANGE

Implications for enterprises:

Threats … Influential new stakeholders Demands for transparency Less control over messaging, segmentation Risks to brand and reputation Regulatory activism

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DRIVERS OF CHANGE

Implications for enterprises:

And opportunities … To reach stakeholders To advance policy interests To build brand To enhance reputation

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THE AUTHENTIC ENTERPRISE

Arthur W. Page Society White Paper

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THE AUTHENTIC ENTERPRISE

In this dynamic and radically open environment, a company must answer:

What business are we in? What markets do we serve? What differentiates us? What do we value? What will endure?

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In place of the voice of “authority”, stakeholders demand proof of authenticity

In place of the voice of “authority”, stakeholders demand proof of authenticity

The enterprise must be grounded in a sure sense of what defines and differentiates it (mission, values, principles, beliefs).

And those definitions must dictate consistent behavior and actions.

THE AUTHENTIC ENTERPRISE

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A CALL TO ACTION

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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To be authentic an enterprise must:

Define and instill company values

Build and manage multi-stakeholder relationships

Enable its people with “new media” skills and tools

Build and manage trust

A CALL TO ACTION

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THE VALUE OF VALUES

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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THE VALUE OF VALUES

Our Credo

We believe our first responsibility is to the doctors, nurses and patients,

to mothers and fathers and all others who use our products and services.

In meeting their needs everything we do must be of high quality.

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THE VALUE OF VALUES

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THE VALUE OF VALUES

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Top down Bottom up Formal Informal Part of the vernacular

THE VALUE OF VALUES

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STAKEHOLDER RELATIONSHIPS

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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Aetna in the 90s

Put customers and shareholders first

Strong form managed care– Referrals

– Pre-authorizations

– Denials

STAKEHOLDER RELATIONSHIPS

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Anti Managed Care Backlash

Physicians, patients rebelled Government mandates

STAKEHOLDER RELATIONSHIPS

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New CEO - A Doctor New values – The Aetna Way Balance the needs of ALL constituents

New approaches Settle lawsuit

STAKEHOLDER RELATIONSHIPS

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The New York TimesMay 23, 2003

STAKEHOLDER RELATIONSHIPS

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STAKEHOLDER RELATIONSHIPS

Coca-Cola

Activists targeted Coke’s India operations Allegation: pollution and water scarcity

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STAKEHOLDER RELATIONSHIPS

Coca-Cola Stakeholder Engagement Group Mission:

Foster a positive business environment that will enable profitable growth …

… by building meaningful relationships and partnerships with diverse stakeholders

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STAKEHOLDER RELATIONSHIPS

Pledge to replace the water it uses

$20 million to help conserve seven of the world's most important freshwater river basins

Coca-Cola Partnership:

World Wildlife Fund

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How do you build relationships with disparate stakeholders?

Be transparent Listen Look for common ground Be willing to change

STAKEHOLDER RELATIONSHIPS

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ENABLE NEW MEDIA SKILLS

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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Personal experiences with company’s employees 2 1 1 1 2 1 1 1.3

Analysts or professional organization opinions 1 2 3 2 1 2 2 1.9

Opinions of colleagues, peers, or friends 3 3 2 3 5 4 3 3.3

What companies are doing for others in your industry6 8 4 7 4 3 6 5.4

Company websites 5 6 5 8 3 5 10 6.0

White papers, research, or case studies 4 4 6 4 7 9 8 6.0

Articles in magazines or newspapers 7 9 10 9 8 6 4 7.6

Online sources, not directly from the company 10 7 7 6 9 8 7 7.7

Tradeshows, conferences, industry forums, events 8 5 9 5 6 10 11 7.7

Influence Source Brazil Ger Spain Italy India Sing JapanAverage

Rank

News stories on TV or radio 11 11 12 12 10 7 5 9.7

Advertising 9 10 11 10 11 11 9 10.1

Direct marketing (e-mail or mail) 12 12 8 11 12 12 12 11.3

Biggest Influence on Opinion about IBM

ENABLE NEW MEDIA SKILLS

IBM Survey of executives in seven countries

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ENABLE NEW MEDIA SKILLS

15.315.517.6

19.2

32.5

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News and infofrom a friend

working at thecorporation

News and infofrom a corporate

website

News and infofrom a corporate

blog site

News and infofrom localnewspaper

News and infofrom local TV

“You have $100 to spend for information on a corporation. Allocate this on how you would spend it for the information.”

Third Annual China Study – Edelman (Conducted by Harris Interactive)

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We continue to advocate IBMers' responsible involvement today in this new, rapidly growing space of relationship, learning and collaboration.

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Engagement with stakeholders R&D Internal consensus

• Siemens Values Fest

ENABLE NEW MEDIA SKILLS

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BUILDING TRUST

“The Dynamics of Public Trust in Business – Emerging Opportunities

for Leaders”

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“Trust no one.”

-- The Wall Street Journal

BUILDING TRUST

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Emerging “social contract”

1889 – Carnegie, “Gospel of Wealth”

1931 – Berle and Dodd, Harvard Business Review

1960 – Packard – “a contribution to society.”

1970 – Friedman – “Profits.”

BUILDING TRUST

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Emerging “social contract”

Quality products and services at reasonable prices

Steady employment in a healthy and safe environment

Support for community institutions

BUILDING TRUST

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STAKEHOLDER EMPOWERMENT

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Most Trusted Corporate HQ Countries

Edelman Trust Barometer 2008

Ger. Japan U.S. S. Kor. India China Russia

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Breaking the contract

1980s – Leveraged buyouts, re-engineering, outsourcing, short-termism, executive compensation

1987 – Gecko – “Greed is good.”

BUILDING TRUST

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Enron WorldCom HealthSouth TYCO HP MSO UnitedHealth

– Lay & Skilling– Ebbers & Fastow– Richard Scrushy– Dennis Kozlowski– Patricia Dunn– Martha Stewart– Bill McGuire

BUILDING TRUST

Breaking the contract

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BUILDING TRUST

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BUILDING TRUST

79

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5458

63

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0%

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Gov't Business Media NGOs

How much do you trust each of the following institutions to do what is right?

Edelman Trust Barometer 2008

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BUILDING TRUST

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1613 10

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2419 18

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10%

20%

30%

40%

50%

60%

70%

80%

90%

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GovernmentNGOs

BusinessMedia

China 07 China 06 China 05

How much do you trust each of the following institutions to do what is right?

Third Annual China Study – Edelman (Conducted by Harris Interactive)

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Corporate philanthropy

Cause marketing

Environmental responsibility

Good labor standards

BUILDING TRUST

Corporate Social Responsibility

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Focus on the core contribution that the enterprise makes to society

Align business objectives with the public interest

BUILDING TRUST

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BUILDING TRUST

Aetna Chairman’s Initiatives

• Genetic testing

• Care at the end of life

GE Ecomagination

GM Volt

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New Report:

“The Dynamics of Public Trust in Business – Emerging Opportunities for Leaders”

New partner:

Business Roundtable

Institute for Corporate Ethics

BUILDING TRUST

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THE AUTHENTIC ENTERPRISE

Arthur W. Page Society White Paper

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“All business in a democratic society begins with public permission and exists by public approval.”

“All business in a democratic society begins with public permission and exists by public approval.”

ARTHUR W. PAGE

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How do you get “public permission” and “public approval?”

By being an authentic enterprise …

… that operates in the public interest – doing the right thing for all stakeholders –

... and does it consistently – up and down the entire organization.

THE AUTHENTIC ENTERPRISE

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Join the dialogue at Page Turner, the Arthur W. Page Society blog:

http://www.awpagesociety.com

THE AUTHENTIC ENTERPRISE

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THE AUTHENTIC ENTERPRISE Relationships, Values and the Evolution of Corporate Communications

Roger BoltonAPCO Worldwide

Arthur W. Page Society Beijing, ChinaNovember 13, 2008

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