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Archives for January 2011

Life After The Financial Crisis Inquiry

The US’ Financial Crisis Inquiry has concluded with a set of damning conclusions (PDF). These are:

  • it was totally avoidable and caused wholly by people’s catastrophic mistakes
  • failures in regulation and supervision had a devastating effect
  • failures in boardrooms were a key cause
  • excessive borrowing, risk and a lack of transparency were all exacerbating factors
  • the US government’s ill prepared response added to the turmoil
  • there was a systematic breakdown in accountability and ethics
  • mortgage standards were the trigger (but not the cause)
  • the removal of the regulation of over-the-counter derivatives was a significant contributing factor
  • failures in the credit rating agencies drove the crisis forwards.

This is nothing short of a manifesto for regulatory reform along CSR lines.  The question is, will it happen?  After all, with a lack of regulation being the second item on the list, can business trust the government to give it the medicine it needs?

Unfortunately, it also raises huge questions about the ability of businesses to self-regulate and take steps where government doesn’t direct them.  So can we trust corporations to do this now?  That seems almost as unlikely as getting strong CSR based legislation.

Now it may seem unfair to tar all politicians and all businessmen with the same brush, especially when the crisis is focused very firmly on the financial sector and treasuries alone.  The trouble is that in a capitalist based society this is the heart of all other activity.  These are the leaders others follow and attempt to emulate: so even if you’re a follower at least some of the tar from the brush has probably spattered you. Us. Us all.

So here are some key things (in no particular order) I believe should come out of this as lessons learned:

  • it’s not all about money; non-financial reporting now has to be seen as just as important as financial reporting; attempting to squash everything into the pounds and pennies bottom line quite simply doesn’t work
  • regulation should no longer be seen as the lowest common standard; compliance must cease being a box ticking exercise; the legal framework should be seen as a foundation to build upon, not an exercise in pseudo-morality
  • transparency has to become the new watchword of politics and business alike; commercial confidentiality can no longer mean keeping everything secret except mandatory disclosures; instead, everything has to be disclosed unless there is a clear case that it will compromise patents etc; competitiveness must now be about the delivery of quality services and products, not backroom deals
  • no company must ever be too large to fail; a resilient and sustainable economy can only be built around smaller organisations which are independent from one another and yet networked closely together; as soon as a single point of failure presents itself it must be removed forthwith; this may mean a decrease in overall efficiency but if it builds in long term stability and reliable growth what’s the problem?

I’m perfectly aware this is me firing off a few rounds from a 12-bore shotgun and that there’s plenty of contentious issues in what I’m saying.

So please, rather than just taking issue with what I think, let’s talk about what you think.  Where should the business and financial world go from here?

Picture Credit: Phoenix by David Armano under Creative Commons Attribution License.

Eight Standards for CSR and Fashion Websites

One of the biggest running sores in the landscape of CSR is the fashion industry.

Clothing manufacture in the UK (outside of Jermyn Street and Saville Row) appears to have all but died out and those garment factories which do still exist struggle to compete with cheap imports from the Indian subcontinent and China.

Trouble is the cheapness of those imports have generally come from grave human rights abuses which, for many a decade, passed along unnoticed and uncommented upon.

Now that consumers are more knowledgeable, shocking health and labour conditions have been uncovered.  Fashion companies throw up their hands and say “we didn’t know”. Right you are then, so do something about it.

One of the ways fashion companies (labels in other words, not retailers) can “do something” is through participation in the Fair Wear Foundation (FWF). [Read more…] about Eight Standards for CSR and Fashion Websites

Facebook Plans to Allow Brands to Sponsor Stories from Users – Without Asking

Facebook is getting more buzz this week with a new advertising program that will enable brands to sponsor user actions.  For example, a Facebook user’s “likes,” his page posts, and his check-ins via Facebook Places could all become content that brands can sponsor.  In simplest terms, brand can pay (based on a pay-per-click or pay-per-impression model) to boost that content up to special placement on the right side of the screen where Facebook ads typically appear.

For brands, Facebook Sponsored Stories is a great opportunity.  Giving prominent placement on screen to user actions that support a brand draws attention to what can be perceived as a customer endorsement.  Research shows that conversations and endorsements of brands on social networks are trusted more than ads, so sponsored stories seem like a perfect match for brands.

However, Facebook users are likely to not feel the same way, although Facebook representatives are quick to point out that sponsored stories will only appear to people that the user has identified as being able to see those types of updates within his Facebook account settings.  There is currently no reported way for Facebook users to opt-out of the new sponsored stories initiative.

According to BrandWeek, both Coca-Cola and Starbucks are signed on to roll out Facebook Sponsored Stories campaigns, and other brands are sure to follow.

Let’s face it, sponsored posts are likely to be more effective for brands on a social network like Facebook than display or text ads are.  It’s true that people notice and respond to people they know and trust over brand messages, and research report after research report supports that.  The problem would come if this level of intrusiveness (i.e., republishing people’s content and conversations without their permission) will be considered acceptable or not to Facebook users.  If users don’t respond well to it, there is the risk that they’ll stop talking about brands altogether.  That’s the type of negative backlash that could really damage a brand’s social media and content marketing efforts.

How do you feel about Facebook Sponsored Stories from the brand’s perspective?  How about from the Facebook user’s perspective?  Leave a comment and share your thoughts.

Image: stock.xchng

A Nice Place to Work . . .


Last week Katherine Ratkiewicz, a Senior Research Analyst at the Human Capital Institute, published a thought-provoking post on one of the HCI blogs.  Ratkiewicz recaps recent events in the U.S. that have prompted a national discussion about civility, and suggests the discussion should extend to workplaces as well as political institutions.

Office politics can be just as intense as any election campaign, and there’s no doubt that once toxic talk gets started in an organization, it can easily spread.  As Ratkiewicz points out “nothing is worse for an organization’s productivity and effectiveness than toxicity”–yet all too often there is no plan in place for recognizing and reshaping problematic situations.

For example . . . what happens when a project is behind schedule, or a particular unit is underperforming?  If the response is blame-shifting, finger-pointing, and/or scapegoating, the result is likely to be harmful to morale, and not particularly productive.  When this is the norm within an organization, there will be a lot of unhappiness.

These days, social media can alert job-seekers—and desirable passive candidates—to toxicity in organizations.  If there is negativity in the company environment, HR may or may not be able to surface the problem, and may or may not be able to foster a solution.  But if your company has a positive environment . . . how can the Careers website communicate that?

Just proclaiming that you have a happy workplace may not carry much weight.  Even employee testimonials, video diaries, event snapshots, and similar online promotions won’t convince most visitors that your company is a little slice of Eden.  In fact, it’s important to avoid the impression of overselling the environment, lest it appear there is something to hide.

A better strategy is to ensure that everything on the Careers site maintains a pleasant, respectful tone.  And design also sends subtle signals—a frenetic look (too much color, needless motion, etc.) can suggest a nervous environment.

For more thought-provocation about workplace communications, check out a new book from experts Vincent Waldron and Jeffrey Kassing: Managing Risk in Communication Encounters: Strategies for the Workplace. Despite the somewhat daunting title, this brand-new text is practical and readable—and it covers territory that is often left out of happy-talk manuals.  The focus here is “risky interactions that threaten identities, relationships, and sometimes careers, including voicing dissent, repairing broken relationships, managing privacy, responding to harassment, offering criticism, and communicating emotion.”  Worth a browse!


(Thanks to the Yorck Project for this image of Giovanni di Paolo’s fifteenth-century painting Paradise.)

Online Communities Trump Facebook to Connect with Women

New research from Burke Research and iVillage (a website and online community for women owned by NBC Universal) reports that women, an audience coveted by many brands, prefer niche community websites over broad social networking sites like Facebook.  This finding presents an interesting opportunity for brands to better connect with women, gain their trust, and build relationships with them.

As eMarketer reports, 51% of women surveyed during this study cited that online communities like iVillage, BabyCenter and CafeMom are places they “trust for information on brands and products.”  Similarly, 47% of respondents reported that these online communities have “the right people for me to seek advice on brands and products.”  These percentages were double or triple the percentage of respondents who believed the same things about social networks.

Equally interesting were the respondents’ answers when asked what online communities and forums are best for and what social networks are best for.  The results follow.

Online Communities and Forums are Best For:

  1. Finding out about new products = 51%
  2. Helping me make a purchase decision = 47%
  3. Entertaining me = 31%
  4. Keeping up with friends and family = 10%

Social Networks are Best For:

  1. Keeping up with friends and family = 74%
  2. Entertaining me = 57%
  3. Finding out about new products = 21%
  4. Helping me make a purchase decision = 16%

As you can see from the results above, women view niche online communities and forums very differently from social networks, and they visit and participate in online communities and forums for very different reasons than they visit and participate on social networks.  In fact, their reasons for visiting and using online communities and forums are almost exactly the opposite of the reasons why they use social networks.

Bottom-line, if you’re not searching for online communities and forums (particularly niche online communities and forums related to your products and services) where your brand’s target female audience spends time, you’re missing a significant opportunity to raise brand awareness, develop relationships and trust, build brand loyalists and advocates, and grow your brand and business.  In other words, online communities and forums are where women are already talking about products, brands and services.  They’re engaged and open to learning on these sites.  As long as you provide useful, meaningful information and avoid self-promotion and marketing messages, you can indirectly build your brand on these valuable niche sites.

Image: stock.xchng