Corporate Social Responsibility Archives

Note: The following article is copied from my LinkedIn feed. Follow me by clicking here.

Stakeholder management is vital to a business’ success. Not to be confused with the financial “shareholders,” stakeholders represent all the persons with a “stake” in your company. This can be anyone from customers to employees, suppliers, and shareholders to the local community and even the planet.

Stakeholder management reminds us that the organization doesn’t exist on a deserted island. Rather, it is part of an ecosystem that constantly must be reviewed for signs of in-balance. Listening to stakeholders helps the savvy manager maintain harmony in this ecosystem.

Entertainment venues are no different. Say, a theater isn’t listening to traffic and sound complaints from the neighborhood in which they operate. Community members have been voicing their opinions across social media. However, social-listening and reporting is not part of the job description for the marketing department’s social media specialist and the issue goes unnoticed. Soon, the complaints gather steam and reach city hall. Afraid of not being re-elected, city officials initiate a temporary noise ordinance and amp up ticketing around the venue. Almost immediately the business begins to suffer and the organization is forced to go on the defensive. This costs valuable financial resources, jeopardizes important relationships, and can even tarnish the brand name.

This example may seem simple, but it is not uncommon. Even more bothersome is the fact that it can be rectified rather easily and with minimal cost. They could assign one of their marketing employees (even an intern) to troll the web for bad reviews on sites such as Yelp, Facebook, Google Search Results, TripAdvisor, Manta, etc. If staffing is an issue, anyone can set-up alerts for the business name on Google. Then, when someone posts said name on the web. .. you’ll get notified about 75% of the time.

Surveys are a great tool to get specific feedback from your customers, suppliers, and employees. Survey Monkey makes that real easy.

Finally, get out and talk to your customers, employees, and community. This may be the greatest stakeholder management tool at your disposal.

The key is to realize that your business exists “because of” the ecosystem in which you operate. That system consists of you, your customers, employees, government officials, competitors, suppliers, the community, and planet. Actively listening to their concerns fosters better cooperation between all involved and initiates greater success.

Marx believed that capitalism was purely negative and that it fed the bourgeoisie graciously at the hands of the proletariat. This made sense when he and Engels wrote the Communist Manifesto in 1848. They had yet to see how capitalism would (and continues) to evolve into a driver for social change.

1.1% of United Airlines‘ stock (or $255 million) was lost today, because consumers demanded vengeance due to the Airline’s unacceptable behavior stemming from how they forcefully removed a customer when they overbooked a flight from Chicago to Louisville days before.

Had the government intervened, it would have taken years for this issue to be resolved. Millions would have been spent in lawyer’s fees, regulation changes, committee building, and analysis. However, only a very small percentage would have been paid by the airline in any type of “punitive”damages.

Instead, the company got flogged publicly on social media and lost millions in market cap overnight, which forced the major airline’s hand to “make things right” not just for the man forcefully ejected, but a new breed of consumer. One who demands fair trade coffee, responsibly sourced salmon, and their brethren to fly home without being bloodied by some corporate bully.

Modern day MBA courses spend a lot of time explaining the importance of Corporate Social Responsibility and this is why. Today, the business world moves too fast. One seemingly small error, or worse a hiccup in accepting responsibility and efficiently correcting the wrong, can quickly become a global phenom. And with markets just as fast, that word-of-mouth on crack will transform into social justice.

This is something that Engels and Marx didn’t have to deal with in the late 1800s and while there is still much room for improvement. The proletariat do have a weapon to knock the bourgeoisie off their high horse, which will continue to enhance the capitalist relationship amongst classes.