Building Consumer Trust
New Models to Protect Your
Freedom to Operate
Charlie Arnot
Charlie.Arnot@Foodintegrity.org
www.foodintegrity.org
Charlie_Arnot
Earning and Maintaining the Social License (Sapp/CMA)
Freedom to
Operate
Freedom to
Operate
Earning and Maintaining the Social License (Sapp/CMA)
Social License
Social License
Definition: The privilege of operating with minimal
formalized restrictions (legislation, regulation, or
market requirements) based on maintaining public
trust by doing what’s right.
Public Trust: A belief that activities are consistent
with social expectations and the values of the
community and other stakeholders.
The Social License To Operate
Rigid
Bureaucratic
Higher Cost
Flexible
Responsive
Lower Cost
Social License
Social Control
• Ethics
• Regulation
• Values
• Expectations
• Self regulation
Tipping
Point
Single triggering event
Cumulative impact
• Legislation
• Litigation
• Compliance
Activists Protest Mulesing
Mulesed Wool Bans
• 2004 – Abercrombie & Fitch boycotts Australian
merino wool
• 2005 – American Eagle Outfitters ban announced
• 2008 – Liz Claiborne (PETA is a shareholder)
announced Australian wool ban
• 2008 – Adidas & Perry Ellis ban wool from
mulesed sheep
• 2009 – John Lewis (UK department store) joins
boycott
Earning and Maintaining the Social License (Sapp/CMA)
Social License
Freedom to
Operate
Earning and Maintaining the Social License (Sapp/CMA)
Trust
Trust
Social License
Freedom to
Operate
Earning and Maintaining the Social License (Sapp/CMA)
Confidence
Value
Similarity
Trust
Social License
Competence
Influential Others
Freedom to
Operate
Trust research was published in December, 2009 – Journal of Rural Sociology
What Drives Consumer Trust?
Shared values are 3-5X more important in building trust than
demonstrating competence
What Does It Mean?
“They don’t care how much you
know until they know how
much you care”
Polarizing Perceptions
Values and Ethics in Our
Science Based Culture
Why we struggle building trust even though we
care and are committed to doing the right thing
Questions of Values and Ethics
Kohlberg’s Moral Hierarchy
Three Levels – Six Stages
1. Pre- Conventional
• Direct impact on me
2. Conventional
• Societal expectations
3. Post-Conventional
Lawrence Kohlberg, 1927 - 1987
• Principle driven
Questions of Values and Ethics
Kohlberg’s Moral Hierarchy
Post Conventional
Principle driven
Conventional
Societal
expectations
Pre-Conventional
Direct impact on me
Universal ethical
principle orientation
Social contract
orientation
The “law & order”
orientation
The “good boy / nice girl”
orientation
Personal rewards
orientation
Punishment-Obedience
We have an ethical obligation to
our employees, our animals, the
environment, our customers and
our communities
We comply with all environmental
and employment laws and
regulations
We take care of our land and
animals because that’s when we
get the best ROI
Questions of Values and Ethics
Kohlberg’s Moral Hierarchy
Post Conventional
Principle driven
Conventional
Societal
expectations
Pre-Conventional
Direct impact on me
Universal ethical
principle orientation
NGOs
Social contract
orientation
The “law & order”
orientation
The “good boy / nice girl”
orientation
Personal rewards
orientation
Punishment-Obedience
Business
Sustainable Balance
Economically Viable
• ROI
• Demand
• Cost Control
• Productivity
• Efficiency
Profitability
Knowledge
Sustainable
Systems
Ethically Grounded
Ethically Grounded
• Compassion
• Responsibility
• Respect
• Fairness
• Truth
Value Similarity
Scientifically Verified
• Data Driven
• Repeatable
• Measurable
• Specific
Objectivity
Knowledge
Feelings
Belief
Brands as Agents of Social
Change
NGOs have discovered that global
brands can do what government cannot
Regulation vs. Market Pressure
“We attack the weakest
link in the company’s
value chain,” Kert Davies,
“We can dance with
you or dance on you”
“Discovering brands was like
discovering gunpowder.” -
Director of Research, Greenpeace
Coles and Woolworth Control 80%
Market Action Works
We have also changed our store egg layouts, with free range
and RSPCA certified eggs now being displayed in a more
prominent
position
than caged
eggs.isAdditionally,
There
is no doubt
that there
a growing to help make
the transition
caged
to free
eggs
easier for our
concernfrom
for the
welfare
ofrange
farmed
animals
customers,
we haveand
significantly
reduced
theofprice of our Coles
in Australia
over the past
couple
brand free
range
eggs.
years,
Coles
have made some considerable
commitments
regarding is
our
sourcing
"This announcement
another
indication that
Coles invests
a lot
of
effort
intowill
ensuring
we meet
ournot
policies.
By
2014
Coles
no longer
sell do
Coles
is acknowledging
that
consumers
customers'
expectations
and that
wethat
will
continue
to review
anyaccept
fresh
pork
products
have
been
the cruelty
is routinely
inflicted
onour
policiesfarmed
and
work
with
ourstalls
suppliers
in2013
this
regard.
using
and by
we
animals
in sow
factory
farms.
Coles
has
recently shown
willimportant
no longer ethical
source leadership
caged eggsand
for we
ourchallenge
Yours Sincerely
Coles
brand
range.
other
supermarkets
to demonstrate that they too
care about the welfare of animals."
Melany Sinclair
Coles Customer Care
Transparency
No Longer Optional
Someone is watching everything you do
all the time
Social Media Explosion
• Today, roughly two billion people are connected to the internet
• 2015 – 80 percent of the global population will have a personal
mobile device that can be both a receiver and transmitter
• We send 2.9 million emails every second
• Upload 20 hours of video to YouTube every minute
• Send 50 million Tweets a day
• Spend 700 billion minutes on Facebook every month
• If Facebook were a country, its 845 million users would make it
the third largest on the planet behind China and India
• Social media now accounts for nearly 25% of time spent online
An Age of Radical Transparency
• Today, everyone with a cell phone is a
cinematographer
• Employees, consumers, customers, bloggers, social
media food communities, activists, NGOs and others
can all directly influence the public conversation
about your company at the speed of Twitter.
• The question is no longer, “will you be transparent?”
but “how will you manage your reputation in an age
of radical transparency?”
Today’s Integrated System
Today’s Integrated System
Today’s Integrated System
Today’s Integrated System
Times Have Changed
“It
is not the strongest
species that survive, nor
the most intelligent, but
the ones who are most
responsive to change.”
- Charles Darwin
The Future of Food Issues Management
“There is a thin line between public, private and NGO
management of the food system. Consolidation
creates huge opportunity but also huge
responsibility. We need to create managers where
and how the public, private and NGO communities
work together to manage the food system.”
- Ray Goldberg, founder of the Harvard Agri-Business
Program, at IAMA, June, 2010
Integrated System Demands an Integrated Strategy
A Brand New Game
Integrated Trust Building Model
Building Consumer Trust
New Models to Protect Your
Freedom to Operate
Charlie Arnot
Charlie.Arnot@Foodintegrity.org
www.foodintegrity.org
Charlie_Arnot