GE, IBM and Ford still top performers in sustainability communications using social media

We're pleased to feature a guest blog today from Matthew Yeomans, a leading expert on social media in the area of sustainability and CSR. We asked him to tell us a little more about the Social Media Sustainability Index, an impressive report that he recently authored on the state of social media sustainability communication among major international companies. Read what he has to say, and then download the free report in full over at the SMI website. It's full of practical tips on how to communicate effectively about sustainability using social media - and of course there's a top 100 list to pore over at your leisure.

"One year ago, we published the inaugural Social Media Sustainability Index, a trawl through 287 major companies in North America and Europe to identify who was using social media tools and thinking to communicate sustainability. At the time we found just 60 companies that were devoting any real time or dedicated resources to that mission.

Fast-forward to the end of 2011 and a new landscape of social media sustainability has emerged. In researching our new report, The SMI-Wizness Social Media Sustainability Index, we identified at least 250 major corporates that are engaged in some form of social media sustainability comms and more than 100 have a blog, YouTube, Facebook or Twitter channel dedicated to talking about sustainability. Those dedicated 100 form the basis of our new Index.

Even as the volume of social media sustainability content has increased, the standout leaders of our Index – GE, IBM, Ford, PepsiCo, BBVA and Allianz – are the same as last year. This we believe is a testament to good social media practice in that none of these leaders consider social media sustainability through the prism of a campaign mentality. Indeed the top companies in our Index all have built upon the editorial platforms and community engagement they had established in 2010.

The social media sustainability leaders also demonstrate that companies who are committed to making their business more sustainable – be it through improved energy efficiency, lowering emissions, policing their supply chains, pioneering ethical sourcing and promoting equitable working environments – have a distinct advantage in social media communications. That’s because they have a good and believable story to tell, and good storytelling remains the most valuable currency in social media. Here are some of the ways the smartest companies are using social media, not just to communicate their sustainability stance, but also to involve the public in building a better world:

• Homage to compelling reportage: Hiring experienced filmmakers, writers and reporters to tell a complicated story well like IBM and Allianz
• Crowdsourcing: Tapping the public for big innovative ideas like General Electric
• Crowdfunding: Enabling collaborative fundraising and donations like BBVA and Bendigo and Adelaide Bank
• Bold alliances: Teaming with established NGOs, charities and conserva- tion watchdogs to support common goals and raise awareness like Levi’s
• Leveraging community: Tasking your massive online following to build a better future through campaigns, contests like PepsiCo
• Platforms not campaigns: Building an ongoing social media sustain- ability communications vehicle like Danone
• Making technology accessible and digestible: Creating content that shows how sustainability technology and initiatives matter to the general public like Philips and Sony
• The wisdom of your crowd: Collaborating with fans to break taboos and challenge the status quo like Kimberly-Clark

These stand out leaders in this year’s Social Media Sustainability Index all have a few things in common. They fully embrace their newfound power to publish and provide useful, regular, transparent and creative content for their social media communities.

It just so happens that we think those qualities are exactly what companies need if they are to succeed in social media communications. And so they form the bedrock of how we have ranked and rated the 100 companies that make the Index."

You can download the entire Index at: http://socialmediainfluence.com/SMI-report/

This post was first published on SMI. Graphic copyright SMI Wiziness

Toyota – or: Why acceleration is not always a good thing

Seeing executives of car companies testifying before congress is not too much of a novel picture. It has happened before. But the context of today’s and yesterday’s appearance of Toyota’s top brass in Washington provides a lot of food for thought.

We have followed the news for a while and it took things to unfold to convince us that this is actually a very interesting issue not just for business, but yes, for business ethics. It is indeed – and even more so, as one of the seminal cases for the business ethics literature has been a rather similar problem. Remember the Ford Pinto, in the 1970s, where Ford had installed a gas tank which exploded at the slightest collisions and allegedly killed more than 500 people? That case though was clear cut in some ways: Ford decided not to deal with this problem for six years because the cost difference between fixing the car versus compensating the victims amounted to $7.04 per car – too much to ask for a company whose only goal at the time was maximizing returns for shareholders.

Superficially, Toyota has ignored the problem with the gas pedals of their cars for a couple of years in the same way. But it is inspiring to ponder the reasons. We would suggest that putting the usual lens of Anglo-American capitalism on the issue is not very helpful. Though many do exactly this: The Economist, applying its mantra ‘Ketchup’ of neo-liberal economics on the issue – which btw. is complimentary with any news item they report on, - just see the scandal as a failure of Japanese corporate governance. As if the Anglo-American model of corporate governance has given us those much more efficient and healthy car companies, such as Chrysler, General Motors, Jaguar, Rover, and… - you get the picture.

We would argue that the Toyota case provides some more subtle and deeper lessons. First, there is the fact that all these deficient gas pedals were manufactured by suppliers Toyota worked with only recently. Following their ambitious goal of gaining 15% of global market share in the car market, the company had to engage with suppliers all over the world beyond their traditional network of ‘Keiretsu’ suppliers in Japan. This poses risks and needs more attention in order to integrate them into the high quality processes the company is known for. So, ethical issues are just a result of bad management. Not because evil people devise evil plots.

At this stage, though, you might ask questions regarding why Toyota did not deal with the problem earlier. Fair point. And again, its not that evil, profit crazed nerds in suits did not care about people dying. A first point one of the executives made in the Congress hearing was that while the problem was know, it was just not communicated between the different units of Toyota globally. While the problem was known in Europe in 2008, it was not ‘shared’ properly with the US unit. This points to the traditional organizational pattern of Japanese MNCs: to keep all core competencies at home and deal with the subsidiaries in the different countries just as delivery units of what was decided in the headquarters. Of course, this does not work for a global actor like Toyota, who needs to take into account that local differences and problems need to feed back into the global organization. So what results in a huge ethical issue is just the result of bad management: not adapting to the global growth of the organization.

Finally, there is another point worth considering. Brought up, we concede in all fairness, by The Economist. Japan is a rather hierarchical culture where criticism of superiors is not socially accepted. In such a culture, raising issues of insufficient vetting of suppliers, criticizing strategic decisions etc. is just not happening. No wonder then that an upfront confrontation of the issues took so much time within the Toyota organization. But again, this is more a cultural issue than a result of evil profit-maximizing apparatchiks.

What it boils down to, in our view, then is that issues of business ethics are not just an add-on, the icing on the cake – but they are rather deeply embedded in core business strategy and an integral part of good management. After all, think of the dosh Toyota has to put up for fixing this issue. Not to talk about the dent on the image of a company whose motto is ‘moving forward’.

Photo reproduced by the Creative Commons License.

Keeping it in the Family? Family Firms, Business Ethics and Social Responsibility

In what we hope will be the first of many guest blogs from our extended family of co-authors and colleagues, here's a post from Laura Spence, the co-author of our CSR textbook, about her recent foray into the ethics of (aptly enough) family firms...

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When I mentioned to a friend that I was going to a conference on Business Ethics and Family Business, he looked askance and said “you’ve seen Dallas, that’s all you need to know, isn’t it?” I had been invited to attend the Family Enterprise Research Conference in Winnipeg, Manitoba in Canada (24-25 April, 2009) because of my involvement in a potential journal special issue on this topic, and rather hoped that there was somewhat more to it than the ruthless pursuit of profit and filial jealousy. Happily this turns out to be the case.

I have long lobbied Crane and Matten - not to mention most of the rest of the business ethics /CSR community - about the need to incorporate small and medium sized enterprises (SMEs) in our research. Finally, I think, we are getting somewhere in that respect, but family business, to date, has remained firmly under the radar. As with SMEs, if it were just about the numbers this wouldn’t be the case. SMEs generally comprise over 90% of an economy’s private enterprises (and that includes both developed and developing countries). Family firms, I have learned, are just as important, and of course include large Multinational Enterprises as well as small businesses. The study of family firms is far from being just about the little guys - globally familiar names that are family firms include Kikkoman Soy Sauce, SC Johnson, Ford, Lego, Aldi, Levi Strauss, Estee Lauder, Marriott and Wal-Mart. This list of example organisations alone has a wide range of reputations as far as ethics goes, so there is no intuitive indication of the influence of being a family firm on business ethics. However, these large firms are light years from the common small family business in many respects – maybe it isn’t fair to bundle them all together when the institutional arrangements are potentially so different, if only in terms of the proportion of employees who are family members.

This brings us to one of the basic starting points when understanding what we mean by a ‘family firm’; definition of the key characteristics has been an important aspect of the literature since the field took off in earnest in the 1980s (at least that is when the first dedicated journal on the subject was launched; Family Business Review). A review of definitions has been offered by Chua, Chrisman and Sharma (1999. Previous definitions, they argue, revolve around combinations of family ownership and family management, with ownership being seen as the most important aspect to being defined as a family business. The authors propose that: “The family business is a business governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.” (p.25).

So where does this leave our expectations of the ethics of the family firm? At the conference, the prevailing assumption was that the family firm, because of a presumed long-term perspective, embedded community orientation and shared vision, would be more ethical and socially responsible than the non-family firm. This sounds great but a little idealistic. As things stand, the fact is we simply don’t know whether there is a clear causal relationship since there has been such very, very little relevant research either theoretical or empirical. Hopefully, the proposed special issue on family business, ethics, stakeholders and sustainability in Business Ethics Quarterly will go some way to revealing whether the ethically challenged oil-rich Ewing family from Dallas - or the virtuous lumber mill owning Waltons of Virginia - provide a good model to reflect on in this barely investigated aspect of business ethics and CSR.

Laura J. Spence, Director, Centre for Research into Sustainability, Royal Holloway, University of London, UK. www.rhul.ac.uk/management/cris