2011
Occupy Wall Street, the Tea Party, and You
Occupy Wall Street and the Tea Party may occupy opposite sides of the political spectrum. But these two protest movements share some common ground. And the overlapping, seething sentiment amounts to a warning sign for companies to shape up as employers, sellers and stewards of the community.
The growing worldwide protests of the “99 percent” and their fury at big banks seem on the surface to be the antithesis of the U.S. Tea Party. After all, the Tea party, which jumped on the scene about two years earlier, directs its anger at government.
What these two social movements have in common, however, is distrust of large institutions. And the institutions distrusted might surprise you. For example, a good many Occupy Wall Streeters have their doubts about of the Federal government. An informal poll of the New York protesters found that 54 percent do not believe that the Obama stimulus program was a good idea. And while Republicans generally are considered pro-business, 56 percent think major corporations have “too much power.”
Occupy Wall Street and the Tea Party reflect broader frustration with an uncertain economy and a sense that the little guy is at the mercy of larger forces. For example, the percentage of Americans who have a “great deal” or “quite a lot” of confidence in big business has slipped from 28 percent to 19 percent in the past decade. Confidence in the U.S. Congress has fallen during the same period from 26 percent to 12 percent.
To their credit, Americans of different political stripes are not sitting passively in the face of economic problems. They are speaking up and fighting back. And that has implications for employers.
In particular, big companies have serious work to do to maintain good reputations or repair damaged ones. This includes companies’ “employment brands.” At least one Ivy League student appalled by Goldman Sachs’ behavior has called for an end to recruiting visits by the financial services giant.
What’s more, companies can expect people to sound off against them for misdeeds and mismanagement like never before. Employees, customers and citizens continue to make their voices heard at sites like Glassdoor.com, Yelp and TrustLink, not to mention LinkedIn, Facebook and Twitter.
It’s not all scary for firms in this new era of transparency and talking back. Companies have an opportunity to step into the malaise and help solve problems. A study from last year found that 63 percent of consumers globally want brands to make it easier for them to make a positive difference. Think of the way Starbucks is planning to collect donations to spur U.S. job growth.
As long as the job-less recovery and the “job-more economy” persist, anger and anxiety will continue to fuel both Occupy Wall Street and the Tea Party. These movements are two faces of the same frustration. Wise companies will heed it, raising their game and their goodness.
A version of this post originally appeared at Ed’s Work in Progress blog at Workforce.com.
2011
Be kinder and gentler … or else
By now, business executives have heard the message many times over: Do right by your employees or face long-term trouble. Usually the argument centers on the need to motivate workers so they are productive and serve customers well.
But there are new twists to the treat-talent-well advice.
Increasingly, consumers and investors care that companies care for their workers. The latest evidence of this comes from advertising firm Young & Rubicam and a paper published earlier this year by Y&R executive John Gerzema and journalist Michael D’Antonio. The authors found that between 2005 and 2009, U.S. consumers expressed a nearly fourfold increase in their preference for companies, brands and products that show kindness in both their operations and their encounters with customers. The research, which involved some 16,000 U.S. respondents, also discovered that nearly two-thirds of consumers avoided companies whose values contradicted their own.
According to Gerzema and D’Antonio, these finding point to a broad “Spend Shift” movement where consumers—partly in response to economic hard times—want better citizenship from the companies in their lives:
“People are returning to old-fashioned values to build new lives of purpose and connection. They also realize that how they spend their money is a form of power, and are moving from mindless consumption to mindful consumption, increasingly taking care to purchase goods and services from sellers that meet their standards and reflect their values.”
Some are skeptical of this sort of consumer research. People don’t always do as they say they do in surveys—this may be especially true in research about spending habits.
But there are harder data points backing the need for a soft company heart. In writing Good Company, my co-authors and I found a variety of studies tying corporate social responsibility—including good employee relations—to positive financial outcomes.
Our own research on the publically traded Fortune 100 also showed the connection. We rated Fortune 100 firms on their records as employers, sellers and stewards of society and the planet, and then compared those rankings with stock market performance. The results? Worthiness pays off. Companies in the same industry with higher scores on our Good Company Index™—that is, companies that have behaved better—substantially outperformed their peers in the stock market.
Not surprising, investors, besides consumers, are gravitating to companies that treat all their stakeholders well. The value of assets linked to the Dow Jones Sustainability Indexes—which list the most sustainable large public companies in the world—grew from about $1.5 billion at the end of 2000 to more than $8 billion at the close of 2009.
It is easy in the current context of high unemployment for businesses to pay less attention to worker needs and desires—like pay raises, job security and career development opportunities.
But demands for decent, generous treatment of workers are now coming from investors and consumers besides employees, their advocates and forward-thinking workplace consultants. Smart companies will not only hear the message; they will crank up the kindness.
This post originally appeared at Ed’s Work in Progress blog at Workforce.com.