On Wednesday I debated Professor Oyvind Ihlen at the London School of Communication’s conference PR and Disruption: Embracing and managing Change. I argued that PR’s main role should be to encourage economic growth, while Oyvind called for placing more emphasis on enhancing civil society. Here’s what I said.
India, China and Nigeria might be doing well, but most of the world economy is either in recession or bumping along the bottom.
But rather than spurring innovation so our economies can grow again, PR professionals promote the hypocritical rhetoric of corporate social responsibility and empty mantras of sustainable development.
Today I want to explore some of the reasons why that’s so, and to suggest an alternative approach.
Let’s begin by examining the classic claptrap of corporate social responsibility.
CSR talks about, among other things, ‘people before profit’, the ‘Enlightened Enterprise’, ‘codes of practice’, ‘engagement’ and ‘community’.
Its advocates say our success or happiness has little to do with prosperity, but depends on how we are fulfilled in other ways.
In her book SuperCorp, How Vanguard Companies Create Innovation, Profits, Growth, and Social Good, Rosabeth Moss Kanter says: “The old ways of doing business no longer work. Today we go to work to do two things: ‘do my job’ and to ‘change the world’ by doing good’.”
According to her viewpoint – doing good is something different from doing one’s core job. Yet my critics will say hang on a minute, CSR is good for business. But that cop-out robs CSR of any chance of delivering what it most wants to: virtue. Being good isn’t likely to be that convenient.
The fact that we can’t secure a consensus on this is revealing.
In reality, most advocates of CSR don’t like – or affect not to like – business. It’s as if they want to be at one with capitalism’s opponents.
Anybody who has had to promote nuclear power, a large-scale wind or solar farm, fracking, a high-speed rail project, a new airport, the chemical industry, genetically modified organisms, or develop a Greenfield site, knows what I’m talking about.
What’s not appreciated is how anti-consumerism and anti-capitalist sentiments have invaded the C-suite.
The most popular film in Beijing and Shanghai – seen this year by 400 million Chinese – is American Dreams in China, a comedy that celebrates the pursuit by three young Chinese entrepreneurs of the American Dream.
Yet, Ian Cheshire, the CEO of Kingfisher, Europe’s leading home improvement retailer, has opined that we have to get consumers in developing countries past wanting the “American Dream of more.” (See Richard Edelman’s Down from the Mountain.)
Cheshire’s message implies there’s something wrong with wanting more. Let’s hope – for the sake of his business – the public don’t decide they want less DIY.
Unilever has 2 billion customers and a $50 billion turnover. It employs 173,000 people in 190 countries. And yet, it has joined the campaign to smash “corporate power”.
In the name of ‘ethical’ ice-cream, Unilever’s Ben & Jerry’s board of directors issued a statement saying: “[W]e realise that Occupy Wall Street is calling for systemic change. We support this call to action and are honoured to join you in this call to take back our nation and democracy.”
In Vietnam, Unilever’s Omo detergent brand runs a CSR programme entitled Dirt is Good, which, according to Richard Edelman, aligns the brand’s business proposition by asserting that “every child has the right to be a child and get dirty”.
Now in Switzerland, where I live, that might be a campaign of some value and much humour – but anywhere in the developing world, it’s cynical marketing. And, most parents know that the problem is keeping kids clean, not getting them dirty. (See Richard Edelman’s Voodoo Academia and my reply Voodoo PR versus “Voodoo Academia”.)
What’s rarely discussed is that most corporate bad behaviour was the result of waning probity. In other words, the undermining of virtues such as integrity, decency and honesty. Certainly, the absence or presence of CSR had nothing to do with the scandals that engulfed the likes of Arthur Andersen, Robert Maxwell, Max Madoff, World Com, Enron, Global Crossing, Barclays and the Co-op Bank.
Enron signed the Kyoto protocol. A decade ago, Barclays endorsed sustainable development. In 1993, Nick Leeson’s Barings Bank backed a report by the Royal Society for the Encouragement of Arts (RSA). It was entitled Tomorrow’s Company: The Role of Business in a Changing World, and it launched the modern CSR movement.
Mathew Taylor, Tony Blair’s former Chief Adviser of Political Strategy, who is now the Chief executive of the RSA, sums up the meaning of CSR when he says: “[it’s] the most important agent of social change, in an age when governments are redefining and limiting their own sphere of influence”. (See his keynote RSA speech: “Enlightened enterprise“.)
So as government’s downsize and outsource their responsibilities, let’s consider what kind of change are we talking about. Let’s examine sustainable development.
The trick PRs, governments and some firms are claiming to have perfected is how to separate happiness and well-being from the material realities of production. But this attack on the benefits of prosperity generates a bag of contradictions that the public instinctively senses.
So, for example, energy efficiency is celebrated for its planetary virtuousness because it dampens demand. When in fact, in a growing economy it would encourage energy usage because the cheaper something becomes – the more of it we can afford to use. (For a detailed examination of this point: THE EFFICIENCY DILEMMA, If our machines use less energy, will we just use them more? by David Owen in The New Yorker.)
The concept of sustainable disruption is nonsense. The essence of development is that it’s transient and fluid. Development – as opposed to stagnation or regression – requires that things move forward and progress. Moreover, development is – or should be – continuous.
However, in the words of the Brundtland Commission, which defined sustainable development, it: “meets the needs of the present without compromising the ability of future generations to meet their own needs.”
But the future is almost impossible to fathom. And eternalizing current assumptions is not wise.
For the last forty years, the world feared, mistakenly, that fossil fuels were about to peak. The unfounded panic about depleting natural resources and the anti-corporate protests this provoked helps explain the findings of Bruntland’s Our Common Future.
Yet in contrast, in the energy business, where I worked for ten years, there’s no such thing as unnatural resources. Nuke, oil, sun; they’re all natural. But it takes the talents of men and women to turn them into resources.
For instance, oil is a commodity thanks to 19th century innovation. For most of history oil – like wind before windmills and atoms before fission – was a non-resource.
Now let’s take closer look at PR in the energy sector because it highlights a general problem.
What unites the PR for nuclear, fossil fuels and renewables is their inability – or unwillingness – to make a business case.
Instead they compete, hilariously, for the title of the most unproductive energy source in the hope that this will endear them to policy-makers and the public. For example, they all claim to create more jobs than their rivals.
When the renewable sources promote their USPs they talk about their small environmental impact, as if we wouldn’t need massive imposing solar and wind farms if we are going to maximize their potential.
And they – like the nuclear sector – view everything through the prism of global warming. Of course, one of their attractions is virtually zero carbon emissions. But, as the struggling PR campaigns for nuclear and solar power know, it’s far from being the decisive merit.
In the wider public debate negawatts have replaced megawatts; thinking local has replaced thinking global.
Though, thankfully, market realities do sometimes cut through the crap.
In the less well-read press, the energy industry has ridiculed Obama’s plan to use fracked gas and oil to achieve energy independence and security. It would, they say, be more beneficial to the US economy to turn gas into a global commodity. And it makes no sense to decouple the US from the existing global market in oil. (See Energy Independence: a misguided pipedream by Professor James Woudhuysen and Paul Seaman on Spiked-online.)
But mostly, just as in so many other industries, the core purpose and realities of the energy business rarely get a mention. The energy industry doesn’t talk loudly about raising productivity by producing massively more energy at vastly reduced cost, using innovative new machines, which employ relatively fewer people. They certainly won’t admit that innovation calls for more risk taking, not less.
Instead, the role of the energy industry in society has been spun to represent something other than what it ought to do and what it actually does and how it operates. BP’s – disastrous and now defunct – Beyond Petroleum strategy personified this spin.
As I close, I want to make a few remarks about trust and modern CSR.
I don’t doubt that firms do have responsibilities to wider society. But to fulfil them, they must grasp that paternalism and liberalism conflict.
Above all, the battle for trust will only be won when firms respect the moral autonomy of the public. That’s something advocates of nudge theory in CSR don’t get. They view the public as irrational beings immune to rational discourse.
But framing the ‘choice architecture’ in the realm of nudging sends the message that we don’t trust the public. It should, then, come as no surprise when the public distrusts those who claim to manipulate its genetic programming.
Leaving aside whether behavioural-nudging is grounded in prejudice or science – “mind-fiddling” is ethically and morally objectionable.
Firms and PR professionals should not pose as the life-style police of moralised consumption.
Consumer firms, actually every firm in every sector, would do better if they promoted freedom of choice and economic development and their core purpose.
So, what needs disrupting is how PR professionals talk about the world. What needs changing is how corporations advocate what it takes to innovate. What needs establishing is a new social contract between the corporate world and the public. We need to create a climate that builds trust and which also celebrates the benefits of production, consumption, profit and risk; one that promotes an honest dialogue about the harsh realities of the modern business world.