THE AUTHENTIC ENTERPRISE
Putting $$$ on Green
Roger Bolton
APCO Worldwide
Zicklin Center for Corporate Integrity
Corporate Communications International
Baruch College
November 7, 2008
1
ARTHUR W. PAGE
“All business in a democratic society begins with
public permission and exists by public approval.”
2
THE WORLD IS CHANGING
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
3
THE WORLD IS CHANGING
Rapidly changing context for global business
At stake:
 Ability to manage relationships
 Competition over identity
4
DRIVERS OF CHANGE
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
DRIVERS OF CHANGE
Globalization
Digital
Network
Revolution
Stakeholder
Empowerment
6
GLOBALIZATION
International
Corporation
7
Multinational
Corporation
Globally Integrated
Enterprise
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.
8
THE DIGITAL NETWORK REVOLUTION
Web 2.0
9
THE DIGITAL NETWORK REVOLUTION
 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
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STAKEHOLDER EMPOWERMENT
 Common interests
 Expertise
 Access to information
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STAKEHOLDER EMPOWERMENT
A new “planetary conversation is building
dynamic new communities. It’s a global
dialogue powered by new technologies.”
-- Ray Kotcher, CEO of Ketchum
12
STAKEHOLDER EMPOWERMENT
INVESTORS
CONSUMERS
LOCAL
COMMUNITY
EMPLOYEES
COMPANY
ACADEMIC
COMMUNITY
GOVERNMENT
13
NGOs
MEDIA
STAKEHOLDER EMPOWERMENT
INVESTORS
CONSUMERS
LOCAL
COMMUNITY
EMPLOYEES
COMPANY
ACADEMIC
COMMUNITY
GOVERNMENT
14
NGOs
MEDIA
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
15
DRIVERS OF CHANGE
Implications for enterprises:
And opportunities …
 To reach stakeholders
 To advance policy interests
 To build brand
 To enhance reputation
16
THE AUTHENTIC ENTERPRISE
Arthur W. Page Society White Paper
17
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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THE AUTHENTIC ENTERPRISE
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.
In place of the voice of “authority”,
stakeholders demand proof of authenticity
19
A CALL TO ACTION
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
20
A CALL TO ACTION
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
21
THE VALUE OF VALUES
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
22
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
24
THE VALUE OF VALUES
25
THE VALUE OF VALUES
 Top down
 Bottom up
 Formal
 Informal
 Part of the vernacular
26
STAKEHOLDER RELATIONSHIPS
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
27
STAKEHOLDER RELATIONSHIPS
Aetna in the 90s
 Put customers and shareholders first
 Strong form managed care
– Referrals
– Pre-authorizations
– Denials
– “Mother, may I?”
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STAKEHOLDER RELATIONSHIPS
Anti Managed Care Backlash
 Physicians, patients rebelled
 Federal Patients’ Bill of Rights (PBOR)
 State mandates
 Jay Leno and David Letterman
 Helen Hunt and Jack Nicholson,
“As Good As It Gets”
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STAKEHOLDER RELATIONSHIPS
New CEO - A Doctor
 New values – The Aetna Way
 Balance the needs of ALL constituents
 New approaches:
– Disease management
– MedQuery
– CDHC
 Settle lawsuit
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STAKEHOLDER RELATIONSHIPS
The New York Times
May 23, 2003
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STAKEHOLDER RELATIONSHIPS
“The once notoriously stingy and fiercely
unpopular company is now frequently
cast as the country's most physicianfriendly insurer.”
BusinessWeek, Jan. 4, 2006
By Jessi Hempel and Diane Brady
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STAKEHOLDER RELATIONSHIPS
How do you build relationships with
disparate stakeholders?
 Be transparent
 Listen
 Look for common ground
 Be willing to change
33
ENABLE NEW MEDIA SKILLS
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
34
ENABLE NEW MEDIA SKILLS
Biggest Influence on Opinion about IBM
Brazil
Ger
Spain
Italy
India
Sing
Japan
Average
Rank
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 industry
6
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
10
7
7
6
9
8
7
7.7
8
5
9
5
6
10
11
7.7
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
12
12
8
11
12
12
12
11.3
Influence Source
Online sources, not directly from the company
Tradeshows, conferences, industry forums, events
Direct marketing (e-mail or mail)
IBM Survey of executives in seven countries
35
We continue to advocate IBMers' responsible involvement today in this
new, rapidly growing space of relationship, learning and collaboration.
36
2008 IBM Social Media Guidelines
Community-updated blogging guidelines to be inclusive of all forms of
social computing: blogs, social networks, wikis, virtual worlds, etc.
•
In the spring of 2005, IBMers used a wiki to create a set of guidelines for all IBMers who wanted to blog. These guidelines aimed to provide helpful,
practical advice – and also to protect both IBM bloggers and IBM itself, as the company sought to embrace the blogosphere. The guidelines were
endorsed by IBM, posted internally and then shared publicly by our bloggers. Since then, IBMers by the tens of thousands have relied on these guidelines
when blogging, as well as when engaging in many other forms of online publishing, discussion and interaction.
•
Now, three years have passed, and many new forms of social media have emerged. So this spring we turned to IBMers again, to re-examine our
guidelines and determine what, if anything, needed to be modified. The result has been one new guideline, regarding online social networks, and a
broadening of the existing guidelines’ scope to include other forms of “Web 2.0” social media.
1.
2.
Know and follow IBM’s Business Conduct Guidelines.
2. Blogs, wikis and other forms of online discourse are individual interactions, not corporate communications. IBMers are personally
responsible for their post. Be mindful that what you publish will be public for a long time – protect your privacy.
Identify yourself – name and, when relevant, role at IBM – when you discuss IBM or IBM-related matters. And write in the first
person. You must make it clear that you are speaking for yourself and not on behalf of IBM.
If you publish a blog or post to any website outside of IBM and it has something to do with work you do or subjects associated with
IBM, use a disclaimer such as this: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies
or opinions.”
Respect copyright, fair use and financial disclosure laws.
Don’t provide IBM’s or another’s confidential or other proprietary information. Ask permission to publish or report on conversations
that are meant to be private or internal to IBM.
3.
4.
5.
6.
37
ENABLE NEW MEDIA SKILLS
 Inside out
 Outside in
 R&D
 Internal consensus
38
BUILDING TRUST
Arthur W. Page Society White Paper:
“The Authentic Enterprise”
39
BUILDING TRUST
“Trust no one.”
-- The Wall Street Journal
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BUILDING TRUST
1890 – Sherman Act
1897 – ICC
1906 – FDA
1914 – Clayton Act
1934 – SEC, FCC
1970 – OSHA, EPA
1972 – CPSC
2002 – SOX
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BUILDING TRUST
Emerging “social contract”
1889 – Carnegie, “Gospel of Wealth”
1931 – Berle and Dodd, Harvard Business Review
1960 – Packard – “a contribution to society.”
1970 – Friedman – “Profits.”
1975 – Filer Commission
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BUILDING TRUST
Emerging “social contract”
Quality products and services at reasonable
prices
Steady employment in a healthy and safe
environment
Support for community institutions
43
BUILDING TRUST
Breaking the contract
1980s – Leveraged buyouts, re-engineering,
outsourcing, short-termism, executive
compensation
1987 – Gecko – “Greed is good.”
44
BUILDING TRUST
Breaking the contract
45
 Enron
– Lay & Skilling
 WorldCom
– Ebbers & Fastow
 HealthSouth
– Richard Scrushy
 TYCO
– Dennis Kozlowski
 HP
– Patricia Dunn
 MSO
– Martha Stewart
 UnitedHealth
– Bill McGuire
BUILDING TRUST
USAToday/Gallup, December 11, 2006.
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BUILDING TRUST
Trust in Institutions to Operate in
Society’s Best Interest
 Armed forces
+43%
 NGOs
+27%
 Education system
+26%
 Health system
+17%
 Trade unions/labor
+2%
 Legal system
-2%
 Global companies
-9%
Accenture The Business of Trust, World Economic Forum Voice of the People Forum
47
* Net Rating = % trust - % distrust
DRIVERS OF CHANGE
U.S. Credible Spokespersons
Source: Edelman Trust Barometer 2008
60
50
40
30
20
10
0
Me
48
Acad.
Doc
NGO
CEO
Blog
BUILDING TRUST
Corporate Social Responsibility
 Corporate philanthropy
 Cause marketing
 Environmental responsibility
 Good labor standards
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BUILDING TRUST
 Focus on the core contribution that the
enterprise makes to society
 Align business objectives with the public
interest
50
BUILDING TRUST
 Aetna Chairman’s Initiatives
• Genetic testing
• Disparities in health care
• Care at the end of life
• Depression management
 GE Ecomagination
 ITT Global Water Leadership
 GM Volt
51
THE AUTHENTIC ENTERPRISE
Arthur W. Page Society White Paper
52
ARTHUR W. PAGE
“All business in a democratic society begins with
public permission and exists by public approval.”
53
THE AUTHENTIC ENTERPRISE
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.
54
THE AUTHENTIC ENTERPRISE
Join the dialogue at Page Turner:
http://www.awpagesociety.com/awp_blog/
http://www.awpagesociety.com
55
THE AUTHENTIC ENTERPRISE
Putting $$$ on Green
Roger Bolton
APCO Worldwide
Zicklin Center for Corporate Integrity
Corporate Communications International
Baruch College
November 7, 2008
56