1 THE AUTHENTIC ENTERPRISE Putting $$$ on Green Roger Bolton APCO Worldwide Zicklin Center for...

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THE AUTHENTIC ENTERPRISE Putting $$$ on Green

Roger BoltonAPCO Worldwide

Zicklin Center for Corporate IntegrityCorporate Communications International Baruch CollegeNovember 7, 2008

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“All business in a democratic society begins with public permission and exists by public approval.”


ARTHUR W. PAGE

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THE WORLD IS CHANGING

Arthur W. Page Society White Paper:

“The Authentic Enterprise”

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THE WORLD IS CHANGING

Rapidly changing context for global business

At stake:

Ability to manage relationships

Competition over identity

DRIVERS OF CHANGE



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DRIVERS OF CHANGE

Stakeholder Empowerment

Globalization

DigitalNetwork

Revolution

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GLOBALIZATIONInternational Corporation

Multinational Corporation

Globally Integrated Enterprise

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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.

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THE DIGITAL NETWORK REVOLUTION

Web 2.0

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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

THE DIGITAL NETWORK REVOLUTION

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STAKEHOLDER EMPOWERMENT

Common interests

Expertise

Access to information

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A new “planetary conversation is building dynamic new communities. It’s a global dialogue powered by new technologies.”

-- Ray Kotcher, CEO of Ketchum

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COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CONSUMERS

LOCALCOMMUNITY

NGOs

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COMPANY

EMPLOYEES

ACADEMICCOMMUNITY

GOVERNMENT MEDIA

INVESTORS CONSUMERS

LOCALCOMMUNITY

NGOs

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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

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DRIVERS OF CHANGE

Implications for enterprises:

And opportunities … To reach stakeholders To advance policy interests To build brand To enhance reputation

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THE AUTHENTIC ENTERPRISE

Arthur W. Page Society White Paper

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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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In place of the voice of “authority”, stakeholders demand proof of authenticity

In place of the voice of “authority”, stakeholders demand proof of authenticity

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.


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A CALL TO ACTION



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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

A CALL TO ACTION

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THE VALUE OF VALUES



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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

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THE VALUE OF VALUES

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Top down Bottom up Formal Informal Part of the vernacular

THE VALUE OF VALUES

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STAKEHOLDER RELATIONSHIPS



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Aetna in the 90s

Put customers and shareholders first Strong form managed care

– Referrals

– Pre-authorizations

– Denials

– “Mother, may I?”


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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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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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The New York TimesMay 23, 2003


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“The once notoriously stingy and fiercely unpopular company is now frequently cast as the country's most physician-friendly insurer.”

BusinessWeek, Jan. 4, 2006By Jessi Hempel and Diane Brady


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How do you build relationships with disparate stakeholders?

Be transparent Listen Look for common ground Be willing to change


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ENABLE NEW MEDIA SKILLS



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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 industry6 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

Online sources, not directly from the company 10 7 7 6 9 8 7 7.7

Tradeshows, conferences, industry forums, events 8 5 9 5 6 10 11 7.7

Influence Source Brazil Ger Spain Italy India Sing JapanAverage

Rank

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

Direct marketing (e-mail or mail) 12 12 8 11 12 12 12 11.3

Biggest Influence on Opinion about IBM


IBM Survey of executives in seven countries

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We continue to advocate IBMers' responsible involvement today in this new, rapidly growing space of relationship, learning and collaboration.

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• 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. Know and follow IBM’s Business Conduct Guidelines.2. 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.3. 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.4. 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.”

5. Respect copyright, fair use and financial disclosure laws.6. 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.

Community-updated blogging guidelines to be inclusive of all forms of social computing: blogs, social networks, wikis, virtual worlds, etc.

2008 IBM Social Media Guidelines

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Inside out Outside in R&D Internal consensus


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BUILDING TRUST



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“Trust no one.”

-- The Wall Street Journal

BUILDING TRUST

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1890 – Sherman Act

1897 – ICC

1906 – FDA

1914 – Clayton Act

1934 – SEC, FCC

1970 – OSHA, EPA

1972 – CPSC

2002 – SOX

BUILDING TRUST

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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

BUILDING TRUST

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Emerging “social contract”

Quality products and services at reasonable prices

Steady employment in a healthy and safe environment

Support for community institutions

BUILDING TRUST

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Breaking the contract

1980s – Leveraged buyouts, re-engineering, outsourcing, short-termism, executive compensation

1987 – Gecko – “Greed is good.”

BUILDING TRUST

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Enron WorldCom HealthSouth TYCO HP MSO UnitedHealth

– Lay & Skilling– Ebbers & Fastow– Richard Scrushy– Dennis Kozlowski– Patricia Dunn– Martha Stewart– Bill McGuire

BUILDING TRUST

Breaking the contract

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BUILDING TRUST

USAToday/Gallup, December 11, 2006.

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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

* Net Rating = % trust - % distrust

BUILDING TRUST

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DRIVERS OF CHANGE

0

10

20

30

40

50

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Me Acad. Doc NGO CEO Blog

U.S. Credible SpokespersonsSource: Edelman Trust Barometer

2008

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Corporate philanthropy

Cause marketing

Environmental responsibility

Good labor standards

BUILDING TRUST

Corporate Social Responsibility

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Focus on the core contribution that the enterprise makes to society

Align business objectives with the public interest

BUILDING TRUST

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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

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Arthur W. Page Society White Paper

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ARTHUR W. PAGE

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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.


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Join the dialogue at Page Turner:

http://www.awpagesociety.com/awp_blog/

http://www.awpagesociety.com


http://www.awpagesociety.com/awp_blog/

http://www.awpagesociety.com/

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THE AUTHENTIC ENTERPRISE Putting $$$ on Green

Roger BoltonAPCO Worldwide

Zicklin Center for Corporate IntegrityCorporate Communications International Baruch CollegeNovember 7, 2008

1 THE AUTHENTIC ENTERPRISE Putting $$$ on Green Roger Bolton APCO Worldwide Zicklin Center for...

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