Question

Topic: Book Club

Robin Hood:how Do You Balance Profits With Doing Good?

Posted by Anonymous on 500 Points
Yes, it's nice to say companies should give something back, and even nicer when they actually do. But if a company's primary obligation -- especially if it has stockholders -- is to make a profit, how can management balance the need to make a profit with expending effort and money for "the greater good?"
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RESPONSES

  • Posted on Accepted
    Good question and perfect timing--especially since every person and company is starting to understand that we need to all shoulder and share the responsibility of healing our planet.

    With my clients, I'm nudging them into supporting good causes by using the arguments of increasing brand equity and increasing awareness via socially responsible causes. That conversation is now much easier than years ago because of the landmark efforts from such companies as Avon (Walk for Breast Cancer). But I recommend including a cause-related initiative among the many initiatives in the marketing plan...in that sense, the marketer isn't letting the love of the cause overshadow the company's cause (to make money).

    And sometimes a company doesn't need to "invest" money into good causes, per se. When I worked at ABC, the network would allot a percentage of its advertising inventory to Public Service Announcements (PSAs). So it didn't spend money on those spots so much as forgo a percentage of profit on them. Thus, that type of strategy can work with management that doesn't necessarily want to 'spend' on just causes.

    Also, the "good corporate citizen" discussion is helpful in backing a cause.
  • Posted on Author
    Some excellent points, mbarber.

    Giving back in ways that don't simply require the company to "donate" a portion of sales/profits would seem to be the best and most effective. I like your discussion of giving back through staff activities. As you say, it can create great morale and improved productivity.

    I think it requires an enlightened management to do these things. Thankfully, more people in business today seem to recognize that there's more to business than just making a profit.
  • Posted by Mark Goren on Accepted
    Funny you should ask this question, David, and that CK should follow up with the green mention.

    I recently read an article in Fast Company that should be required reading for any business looking to do some good while being respectful of the bottom line – in some cases, very respectful.

    "50 Ways to Green Your Business" appeared in the November issue, but you can read it online: https://tinyurl.com/yttsga

    Though these solutions aren't of the typical charitable variety, they do offer a lot of insight into how it's possible to be responsible to the people live with and those we are responsible to from a corporate perspective.
  • Posted on Accepted
    Making a profit and doing good are not mutually exclusive. There is virtue in building a sustainable, efficient enterprise that employs people, provides something of value to consumers, and is respectful of non-consumers.

    Providing a profit to the shareholders is a necessary element to building a sustainable enterprise, so as it turns out, if the other aspects of the business are accounted for, making a profit in fact serves the greater good.
  • Posted on Author
    Yes, Mark, that's a good article in Fast Company. Green can be profitable.

    NBC went green last week, with many of their programs talking about environmental topics and The Today Show doing features all week on relevant subjects. Don't know if this effort impacted ratings, which equates to the bottom line. But it helped spread the word about green issues.

    Anyone have thoughts on what NBC did?
  • Posted on Member
    Mark's right...that article is quite good. Funny how we can all help in itty-bitty ways and how those little ways make a BIG difference.

    And having read enough of Cam's good answers over the last year, I think he should run for office. Look at his response up there, he just commands an audience to listen to him (Cam, I mean that in a very good way as you know, my friend ;-).

    PS: Right now I'm just hoping NBC will do right by the writers on strike ;-). I've long loved NBC's "The More You Know" campaign that supports diversity, AIDS prevention, etc. (all through creative PSAs).
  • Posted on Author
    Thanks for the input, Grace.

    Bob, NBC did promote thgeir green initiative in advance and hopefully it made some viewers think a bit more carefully.

    I, too, hope green isn't just the trend of the moment. I wrote about it over at my 2 cents last week ( https://reichcomm.typepad.com/my_weblog/2007/11/the-color-green.html ), and I said going green for marketing purposes is fine, as long as it's real. If it's merely a slogan with nothing behind it, people will find you out and call you out.

    Like with cause-related marketing that Robin Hood Marketing talks about, it's got to be real to work well.
  • Posted on Accepted
    Cause-related marketing like CK points out are awesome vehicles. Green activities are helpful too. Heck, making a profit on greener products is becoming quite lucrative. Just being a producer of LED-related lighting equipment automatically qualifies you as being green, cool, invest-worthy!

    But I think mbarber has hit onto an important point regarding employee involvement. If happier employees are good for business, create a culture that allows for individual/group activities near holidays and other events. Sometimes, whole businesses and subdivisions that are dependent on working with foreign entities/offices, find themselves at half their productive capacity because of Chinese New Year (insert other foreign holiday). If workflows can be designed for efficiency (more batching, less multitasking), allott the extra time for good stuff.

    In this sense, we can see that doing good can still be profitable. Burnt out employees aren't great for business anyway.
  • Posted by Drew McLellan on Accepted
    I believe one of the most ROI-centric issues around doing good is the impact it has on your employees.

    When a person works for a company that gives back to the community, that supports their desire to give back and teams from the company participate in these activities together -- there is a very healthy self of well being and collaboration.

    Helping individuals make a difference that is more significant than they could do alone is an excellent retention and recruitment tool.

    Talk about good word of mouth!

    Drew
  • Posted on Author
    I agree, Drew. Employee WOM can be very powerful.

    It all, however, mist be based on realkly doing something good, not just talking about it. Companies jumping on the current "green" bandwagon need to really do something "green" rather than simply incorporating green into a logo or slogan or ad. There must be substance behind any good a company wants to market, or it's phony and will be found out eventually.
  • Posted on Author
    Juliet, great input. Yes, there are many ways we can be responsible and give back as we do our everyday business. They are too often overlooked.
  • Posted on Accepted
    I agree with much of what I have read above. When all is said and done, most Fortune 500 companies and really most companies, live and die by their brand. In today's day and age, one of the smartest things a company can do to bolster their brand is look at sustainability issues and becoming better corporate "citizens." It is absolutely essential that these efforts go beyond "greenwashing" and the companies truly embrace the ideals they espouse because conscious consumers can see right through flimsy efforts. But as far as I am concerned the best way to build brand equity and support the bottom line is for companies to change their practices and support just causes.
  • Posted on Author
    Scotq, I think that as consumers have easier access to voicing their opinions, thanks to the web, more com[panies will be forced to adopt causes and be better corporate citizens. We've already seen how bad behavior can quickly be communicated around the world and how it can have an impact on sales. As it happens more frequently, companies will be forced to behave themselves or risk costly consequences.
  • Posted on Member
    Hi--Just some off the cuff comments--took a quick look at the responses thus far. It's all about green and green is good. But it's not the "all." Glad so many out there are supportive of green initiatives and every business should do their part. But there is so much more a company can do

    1. Matching contributions that employees make to approved non-profit organization.

    2. Buying a table at a local non-profit organization’s gala--meaning sponsoring the event. Usually comes includes an ad in the program, dinner for ten of your employees and/or clients, signage and mentions from the podium.

    3. Encourage your employees to get involved. Get them to help people…do it as a corporate group and promote the brand…reward with dinner.

    4. Are you in the US? If so, encourage your employees to get involved in the Taproot Foundation. Never heard of it? It's in a number of major cities (including San Fran, Boston, NY, DC and others). They call it "the business peace corp."--professionals helping selected non-profits with financial advice, branding and messaging, naming and logo design, developing annual reports, web design, management, etc. Great thing for your employees to get involved in. In the process your company gets a lot of attention. Give them a little office time to take of their responsibilities for their project.
    Just a few ideas about giving and helping the corporate cause.

    Brin Lewis




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