Corporate values are all the rage these days. They’re worthless unless companies are willing to sacrifice for them.
I say this because it’s just too easy to spend money, especially on topics that marketers have identified as important to customers. “Doing good” has been a function of communications outreach for decades; wether you call it cause marketing, corporate philanthropy, or corporate social responsibility, it’s easily rationalized as a marketing expense. The budgets are already there, most of the time.
It’s just a matter of swapping out explicit messages of “buy our stuff” for implicit ones like “we’re doing good (so please buy our stuff).”
For years, we’ve seen it in the campaigns to assert environmentalism as a corporate value, which has led to many instances of greenwashing (spending money on communications campaigns intended to obscure or subvert awareness of underlying, less green business practices). Values of community engagement have been evidenced by donations to schools, and ones of career development asserted with job fairs. Instances of individual employee effort are regularly dredged out companies, and held up as public proof of one or another value.
Corporate websites proudly declare values (or a corporate mission, or the latest PR blather, “purpose”), and offer these mostly symbolic gestures as evidence. They claim to address major topical issues, yet are rarely held accountable for effecting real change…which is on purpose, since few values-driven campaigns ever specify and then report back on accomplishments (other than the occasional percentage improvement in one thing or another, usually devoid of any absolute numbers or context).
The point is to talk about the things potential critics might otherwise attack, and which market research says customers expect. It’s just business.
Only values aren’t just business; they’re aspirational ideas, defined boundaries, and measures not of what a company does, but why and how it functions. So I’d suggest you can’t spend money on them like they’re attributes of your branding strategy.
You have to be willing to lose money because of them.
Just like in our personal lives, it’s easy to say things when everything’s going along swimmingly, only when things go to crap, principles appear less set in stone, circumstances can outweigh tenets, and what we want to be gets beat up and bloodied by who we are. The true test of a value isn’t someone’s ability to say the right thing when it’s easy, but do the right thing when it’s hard.
Consider Starbuck’s racial sensitivity training earlier this week. On its website, the company promotes “Creating a Culture of Belonging, Inclusion and Diversity,” and lists 10 programs and campaigns on which it spends money. It’s all legit, and it’s smart business since diversity among its 175,000-person workforce isn’t just unavoidable, but a potential benefit it should develop.
Lots of companies do similar things.
When it was revealed that its policies in practice didn’t live up to its aspirational values, however, it closed stores to kick-off more training. It’s hard to calculate exactly how much it cost, but I figure it walked away from at least $5 million in sales, and probably a lot more (I used net revenue/stores/hours, and then US stores x hours closed). With more than $22 billion in net revenue last year, that’s a drop in the bucket, and in some ways it felt like the sort of PR stunt that I dislike. But it was willing to lose money for its values.
There are better examples: For instance, when CVS decided to stop selling cigarettes, it gave up $2 billion in annual sales, and its stock price has trended down generally ever since. Bank of America announced after the Parkland mass murder that it would forsake revenue from manufacturers of “military-style firearms,” though it didn’t specify the amount of money it would lose (like the many companies that cancelled their promotional deals with the NRA after the killings, the real “cost” of such gestures may well be in how many gun advocates choose to take their business elsewhere).
Netflix has a robust culture manifesto that says it values people, and then outlines policies like unlimited, untracked vacation, and parental leave that rivals the deal Swedes get. That has to cost them lots.
Where we’re really seeing companies walk the talk on values is in the entrepreneurial space, wherein businesses are committing to give a percentage of sales or profits to charitable causes (or donate merchandise for every product sold).
The cynical interpretation would be that all of these examples are marketing, so they’re suspect, but here’s the important distinction: If a company risks offending certain stakeholders, or willingly leaves money on the table (which offends the very gods of commerce), it’s living up to a value. If it’s simply saying things its stakeholders want to hear, it’s marketing.
Many so-called “corporate values” wouldn’t pass muster using this litmus test.
There’s no reason why a value can’t help a company’s marketing, but it’s not a prerequisite. What’s required is sacrifice, and a willingness to take action that may have no communications benefit whatsoever.
Otherwise, corporate values are worthless.