BRINGING

BUSINESS
HOME

CONTENT
04

06

08

12

16

18

Introduction

Business matters

The battlegrounds

Great expectations

What is business for?

Business in the media:
reflections and perceptions

TS
20

Businesses and their employees:

the hardest sell?

21

Leaders and business:

the personal challenge

22

Going beyond doing well

by doing good

24

Businesss communication trouble:

how bad is it?

28

Conclusions:
businesses and the new reality

Tim Allan /

Managing Director, Portland

INTRODUCT
Welcome to Portlands guide exploring how businesses
can tackle the increasingly vocal and strategic threats to
their reputation and their ability to operate

ime was, corporate communication was

relatively straightforward. The chief
audiences for public companies were
shareholders and equity analysts. There was a
relatively formulaic way of getting out a message
to them through the financial media.
This has fundamentally changed. Technology has
transformed the media landscape on which
businesses communicate. There is now an ability
and a need to communicate through owned
and social media channels as well as through
traditional media.
More importantly, the audiences that care about
business communications and affect businesses
fortunes - are much broader and significantly more
hostile than was once the case. The financial crisis
brought into sharp relief the negative externalities
that businesses could create, and this has
understandably led to a higher level of scrutiny of
the activities of all businesses.
Combined with a technological revolution which
allows criticisms of business to be rapidly amplified
and disseminated, this has meant that businesses
face unprecedented communication challenges.
The value of business to society something that
used to be taken for granted is now under severe
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Bringing Business Home /

scrutiny. Many businesses feel that they are having

to justify their licence to operate.
So reputation management matters more than
ever. And this collection of essays and analysis
seeks to identify the challenges and opportunities
that come along with that, and point us to how
businesses can do better.
Marc Sidwell of City AM communicates about
business everyday. He gives us an overview of
what he believes can be, and should still be, a
mutually beneficial relationship between business
and society.
Two people with their own experiences of dealing
with strongly felt attitudes and a highly contested
media environment are Alastair Campbell and
James OShaughnessy. Each has given us his own
take on the way attitudes to business seems to
have shifted.
To give us an outside view, we have invited Stephen
Howard from Business in the Community to talk
about the value of leadership in business and the
difference it can make to reputation.
Claire McCartney from the Chartered Institute of
Personnel and Development then discusses the
way businesses must first get the internal story

TION
right: if you cannot convince your own
employees, the outside world will be
too much of a stretch.
Beth Rigby from the Financial Times
has seen media attitudes to business
reporting change both to reflect public
attitudes but also to shape them. She
gives us her take on how that process
has unfolded and what it means for
business today.

This presents a picture

of a nation which values
business but is not
entirely at ease with it

We are also pleased to present the thoughts of

Dorothee DHerde of McKinsey, who has a personal
take on whether the business motives for doing
the right thing are the real reasons for business
doing good.

I hope all of this gives you a flavour of the work we

do with clients every day. If you would like to
discuss any of the issues this document covers,
please dont hesitate to get in touch. Good business
communication has never been more challenging,
or more vital.

To get a view of the general publics mood, our

partners ComRes have carried out extensive polling
to understand the sort of factors that influence
British attitudes. Their findings point to where the
points of connection might be and the factors that
make a difference.
Finally, to sketch out the map of where this takes
us, Portland Partner Oliver Pauley gives his
diagnosis, and outlines Portlands rules for
constructing a strategy.

info@portland-communications.com
www.portland-communications.com
@PortlandComms
+44 (0)20 7842 0123

5/

Marc Sidwell /

Managing Editor, City AM

BUSINESS M
H

ow we talk about business matters. As the

economic historian Deirdre McCloskey says,
When in the eighteenth century the British
became a polite and commercial people, the
modern world began. In other words, while
economic growth needs entrepreneurial individuals
and the right government policies, it also requires a
culture that celebrates commercial activity. The
industrial revolution was made possible by a
positive shift in British attitudes to business. Today,
Chinas rocketing economic success is built upon
the slogan, commonly associated with Deng
Xiaoping, that even in communist China to get rich
is glorious.
That makes this report essential reading. The range
of its contributors, from different fields and shades
of political opinion, shows a consensus as to the
scale of the problem in Britain today. It is cleareyed not only about the reputational difficulties
businesses currently face, but also recognises that
a slowly-improving economy will not be enough to
change this in the near future.
But this report is not a counsel of despair. It offers
a clear account of where we are now and thoughts
on the way forward. As such it is a vital
contribution to the debate.

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Bringing Business Home /

And there are reasons for hope in the

accompanying research from ComRes.
While two thirds of the public think trust in
business is on the decline, only 18 per cent of the
public say that businesses in their local area are
too focused on making big profits. And around
three quarters of people have a higher opinion of
their own employer or the employers of their
friends and family than of business in the abstract.
That suggests that when people engage with a
business, and feel the direct benefits it brings to
their lives, it regains their trust. Too often,
consumer-facing businesses have squandered this
goodwill with a neglect of customer service or
insufficient focus on value for money. And in the
end, the things that people value in business today
remain pretty straightforward: 94 per cent of the
public say customer service matters and 73 per
cent cite value for money.
To restore trust in business, firms cannot simply
wait for the national conversation to turn in their
favour. They need to rebuild relationships of trust
with their customers, who still want to see the
traditional virtue of capitalist firms: their power to
offer better goods and services for less money.

MATTERS
And for all the technological changes
and their new challenges, the heart of
business remains a very human
interaction: a mutually-beneficial
exchange. When firms forget the deal
they must always strike, even the
sleepiest of customers will eventually
be roused against them.

The heart of business

remains a very human
interaction: a mutuallybeneficial exchange

Business has always been a moral

pursuit. The words of a great Christian
scholar of the twelfth century, Hugh of
Saint Victor, remain true: The pursuit of commerce
reconciles nations, calms wars, strengthens peace,
and commutes the private good of individuals into
the common benefit of all. For their own good, and
the good of society, firms need to help us all
remember that.

7
7 //

THE
BATTLEGROUNDS

Businesss struggle to find a receptive

audience is taking place in several arenas

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Bringing Business Home /

POLITICS
With politicians so keen to find the solutions for the
fallout from the economic crisis, businesses have
often taken the blame. A need to please voters has
made demands for higher taxes and more regulation
more vocal.
Parliamentary Select Committees have recently taken a
tough line against perceived bad business practice. The
reform of Select Committees, and the election of their
Chairs grant them more influence and higher media
profile than ever before. Many Committees are now very
eager to call business representatives to give evidence
under intense public scrutiny, most notably the Public
Accounts Committees grillings of corporations and
tax advisers.

Indeed Corporation Tax has become a key talking point in

Parliament, shown by the fact that in 2011 there were
588 mentions of the Tax and another 507 in 2012, with
574 in 2013.
The 2013 party conference season saw a substantial
ratcheting-up of anti-business sentiment, with Ed
Miliband finally getting to set the pace by casting himself
on the side of the people against energy providers and
other vested interests. The interesting thing was the
Governments response: initially focussed on dismissing
the Labour attack as misguided, the coalition soon
generated its own counter-proposals that seemed to
accept the overall sentiment.

MEDIA
Newspapers and broadcasters are of course businesses
themselves, and indeed have sustained their own
massive reputational damage in the past few years. Yet
their coverage of business has been gleeful in reporting
parliamentary criticism, and they are happy to publish
and re-publish estimates of tax avoided or whatever the
latest scandal is.
In 2007 there were 1,349 articles mentioning
corporation tax in the national press; by 2012 this had
more doubled to 2,715. In 2013 the number stood at
nearly 3,800.

For the popular right-of-centre press, scrutinising

corporate tax arrangements has allowed them to chime
with public discontent with austerity whilst broadly
backing the Governments policy.
In left-leaning titles, big business and accusations
of an out-of-touch government are being combined
to encourage perceptions of a class that is actively
indifferent to the impact of austerity on families.
Even strongly free market titles such as the Financial
Times now carry comment pieces discerning between
the legal obligation of companies to pay tax, and the
societal norms that they ought to observe.

LOCAL
One of the side effects of the decline in UK regional
manufacturing has been the loss of the type of town
where the presence of a local employer was felt not just
by the employees but by the members of the social club,
the supporters of the sports team and the local housing
tenants. This relationship created an intrinsic link
between the towns biggest employer and its residents.
Some businesses are still very closely associated with
local areas with a long history think heavy industry in
Barrow, Dagenham and Derby while others represent
more recent developments, such as the high-tech and
telecoms cluster in the Thames Valley. But as high
streets are perceived as becoming less locally distinctive,
and the grand patrician experiments of Bournville and
Port Sunlight are consigned to history, fewer businesses
are immediately identifiable with a particular locality.

The difficulty, though, is this comes at a time when

Government policy places localism at the centre
of decisions over planning and the development of
services. This places businesses under greater scrutiny,
and perceptions of their localness matter a great deal
at pinch points such as planning applications.
Beyond this, though, the lack of a natural constituency
or sense of groundedness can affect the overall
perception of a business and remove any instinctive
sense of support that people might feel.
The challenge for business is to create a compelling
story around local engagement, and use that in a way
that works beyond the boundaries of that locality.

9/

IN THE TILLS
Numerous ethical consumerism campaigns have
sprung up in the past few years, urging boycotts or
direct action against businesses. UK Uncut, 38 degrees
and others provide a focal point for annoyed citizens,
rallying activists to generate more attention for
their causes.
These short term campaigns can create moments of
crisis for businesses. More seriously, perceptions of

business behaviour can affect general buying habits in

a quieter and long term way.
Specific data on the commercial impact of consumer
issues-led behaviour is difficult to discern, but at the
height of Starbucks travails over tax, Whitbread (which
as owners of Costa were perceived by some to have a
more ethical tax strategy) reported a 7.1% uplift in likefor-like sales at Costa.

THE FOUR GEARS OF DIGITAL

Hardly a day now goes by without new evidence of the
way social media is driving increased transparency and
accountability in the corporate world. Its a lesson that
everyone from the Daily Mail to Asda and Virgin Media
have been taught recently.
When the Mail criticised Ed Milibands late father, it was
the twittersphere which amplified the Labour leaders
angry complaints. The jokey hashtag
#myfatherhatedbritain started trending and an Alastair
Campbell-inspired online petition got tens of thousands
of signatures to put the Mails behaviour and culture
under the public spotlight. As heated debate about the
new press watchdog continued, the Suns Jane Moore
declared Twitter is the new regulator.
When Asda advertised one of
its Halloween costumes as
Mental Health Patient, one
tweet sparked an avalanche of
protest which prompted the
supermarket to pull the
product within hours.

Companies like Asda and Virgin Media react quickly, not

just because its the right thing to do, but because its
good for business.
In the old world, the PR industry advised businesses to
save face, by not telling more than they have to. Now,
companies are embracing both transparency and
authenticity. Transparent businesses will be more
financially successful and valuable; they will innovate
and provide better service to their customers, and
people who work within these firms will be happier.

Bringing Business Home /

It used to be the case that corporate messages went

from management to media, via a PR team which used
their relationship with individual journalists.
Communication could be controlled and audiences
segmented. Nowadays, increased transparency means
you darent try to give one message to shareholders and
another to customers or employees.
Nor is communication any longer a one-way street.
People expect every organisation to be ready to explain
and respond.

I believe that, going

forward, transparent
businesses will be more
financially successful
and valuable...

Jim Boyden posted a

photograph on Facebook of a
bill from Virgin Media for his
recently deceased father
in-law which included a fine for late payment. The post
was shared more than 53,000 times, forcing the
company to apologise to the family.

/ 10

The digital age also needs new forms of engagement.

We are not just communicating to an audience anymore
but communicating to an audience that has an
audience of its own.

More and more, this means that

business itself needs to change
culturally and structurally.
As David Jones, author of Who
Cares Wins: Why good business
is better business puts it
the price of doing well is
doing good.

Consumers increasingly want to

spend money with companies
they feel are authentic and care about their consumers
and their impact on the world. Ignore complaints on
social media about poor service, and corporate
reputations, sales and share price can be hit. Act badly
in one part of the world and you can expect a damaging
consumer reaction in markets thousands of miles away.
Reputation matters more than ever before. Protecting it
has to be put front and centre of your communication
efforts. This requires combining the traditional skills of
strategy and messaging with a fresh approach to
engagement and transparency.
We at Portland have developed a model called The Four
Gears of Digital to help you organise your thinking.

It should start with STRATEGY and the development

of an overall narrative and message. The approach to
digital is to bring the business goals and values to life
and then engage around it. Proper strategic thinking
comes before tactics which then allow you to use a
variety of formats to deliver the message.
People expect every organisation, corporate and
government, to ENGAGE around the messaging, to
explain and respond. It doesnt matter whether theres
any legal imperative for an organisation to respond;
audiences now expect it.

How do you then DELIVER the message? For this youll

need an understanding of different formats, different
social media platforms, as well as SEO and writing for
the web. Socialising of the content is likely to involve an
approach to devolved and shared responsibility within
the organisation. Underlying all of this is an
understanding of which platforms your audience uses
and the type of content that engages them.
In this new era of TRANSPARENCY, the notion of
corporate and government privacy is dissolving. People
expect data, expect to see behind the scenes and expect
to hear direct from the CEO. Theres an assumption that
a much bigger array of tools will be used to deliver a far
more detailed and nuanced picture.
Messages

Planning

Narrative

The approach to digital is

to bring the business goals
and values to life and then
engage around it.

Context

Explain

Blogging

ATEGY
STR

Data

Infographics

The 4 gears of

GAGEMENT

Respond

Two way

DELIVERY

People expect data,

expect to see behind the
scenes, expect to hear
direct from the CEO.

Rebut

EN

ANSPARENCY
TR

Tools

People expect every

organisation, corporate and
government, to engage
around the messaging, to
explain and respond.

Social

Search

Socialising of the content is

likely to involve an
approach to devolved and
shared responsibility within
the organisation.

Capability

Empowerment

11 /

Alastair Campbell

GREAT
EXPECTA
Portlands Chief Strategy Adviser on the shift
in public perception of business

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Bringing Business Home /

ATIONS

13 /

odays media environment can be an

unforgiving place. They have never been
shrinking violets, but Britains journalists
nowadays pursue bad news with an aggression
they can never quite summon for positive stories.
The ratio of good news:bad news stories is at an
all-time low (perhaps as much as 1:17, according
to the most frequently-quoted statistic) and the
overall picture you might gather from the news is
of a country and a world in a constant state
of doom.
When it comes to business it is clear what leads
the news. Scandals, excesses and corporate
disasters - of which there have been plenty
- occupy the business pages, and are almost
invariably the only reason business stories ever
make it onto the front page.
The journalists writing the story will say they are
simply giving readers what they want.
There is an interesting debate to be had about
whether the media lead or follow public opinion,
but on this view of changed attitudes to business,
they may for once have a point. The anti-business
turn taken by the media in many ways reflects
a change in how we, as people who read the
papers and watch TV, feel about business. The
collapse in trust of the banks was the climax of
this change, rather than a whole new chapter. And
underpinning it all are changed expectations of
both public and private sectors over the last 25
years or so.
Back in the 80s, the divide seemed quite clear. We
saw the public sectors role as collecting the taxes
needed to provide the health, education and other

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Bringing Business Home /

services we relied on as a country. Because of this,

citizens tended to be more appreciative of what
they got and more forgiving of failures. We applied
different standards, though, to the private sector.
Customers expected business to be focused on
making money but, because of this, believed they
had a right to expect good value and service.

Corporate
reputations which
have taken decades to
build can be destroyed
in hours
Provided these expectations were met, no one
worried too much about the level of their profits.
It is an exaggeration to say the division was as
clear cut as public sector good, private sector bad.
But there was certainly a large element of public
sector selfless and private sector selfish.
In the last 25 years, this divide has disappeared.
We now view public services as customers rather
than as grateful recipients. Our expectations
are higher and our complaints louder. The public
services that could once take public support for
granted are now under the same pressure to
deliver as the private sector.
At the same time, we have become more
demanding of business. Milton Friedmans belief
that the only social responsibility of a company
was to increase profits now seems to belong to

a very different age. Values always mattered in

the public sector. Now they matter in the private
sector too and businesses, from banks to oil
companies, pharma to newspaper groups, have
found what happens when the public mood settles
around the notion that the values fall short of the
carefully crafted image. They are all discovering
that once a reputational fall occurs, it is hard to
regain the lost reputational capital.
So now instead of huge profit margins bringing
praise, they now bring suspicion. There is anger
about big bonuses. The demands that businesses
demonstrate they care about the environment
or human rights or the communities where
they operate are no longer fringe concerns but
mainstream. The mistakes and greed which
led to the global financial crisis have certainly
accelerated this change and lack of trust in the
private sector. But the shift in attitudes was
already well under way.
Both private and public sector have to deal with
a harsher and faster media environment which
reflects and to some extent leads these higher
expectations. Twitter and other social media
enable instant judgements to be shared widely.
What happens in one country now affects how a
company is viewed around the world. Corporate
reputations which have taken decades to build can
be destroyed, or the seeds of such destruction
sewn, in hours.

attempts to defend the indefensible, and present

policies aimed at dealing with a failing energy market
as some kind of return to Marxism, it is apparently
not one that all businesses or media yet accept.
Indeed, the reaction to Ed Milibands conference
speech suggests that some people in business
have yet to recognise that economics alone cannot
erase peoples sense of fairness. The more nuanced
reaction of government ministers suggests the
politicians are ahead of many business voices in
understanding the shift described above.
Tempting as it may be, there is no point in businesses
complaining that these expectations are unrealistic
or the level of scrutiny is unfair. It just is. Companies
have to accept this new accountability and recognise
that demonstrating, every day, the social value
of what you do is now fundamental to long-term
strategic success.

Values always
mattered in the public
sector - now they
matter in the private
sector too

One of the central tenets of New Labour was that

there was a strong two-way relationship between
social justice and economic efficiency. We argued
that one could not be had without the other. It is a
truth which remains, if anything, more compelling
today than when we were in power. But from their

15 /

James O Shaughnessy

WHAT IS
BUSINESS FOR?
Portlands Chief Policy Adviser examines
a surprisingly difficult question

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Bringing Business Home /

Businesses are
just another form
of social institution,
created by people
in order to further
human flourishing

f you are a
conservative,
what are
businesses for?
The answer to that
rather innocuous, even
nave, question isnt
quite as simple as one
might think. And finding an
answer that chimed with the
views of voters, particularly swing
voters, was an essential challenge for
the new Conservative leader in 2005 as he
sought to modernise the Party and lead it out of
the electoral wilderness.

For many years, when the ideas of the Austrian

School of economics were dominant, if youd
asked a Conservative MP the answer to the
question he (and they are still largely he) would
have said, It is to produce things and services,
to provide jobs, deliver growth and make profits.
But is that is that really the limit of firms role
in society?
It wasnt until David Cameron became leader of
the Party that it became possible for the centreright to articulate a wider vision of the social
value of business. This is, in fact, a reversion to
a more classical conservative vision, derived
from the Adam Smith of The Theory of Moral
Sentiments rather than the author of The Wealth
of Nations.
In this alternative vision, the role of business is
primarily economic, but it does not stop there.
Businesses are just another form of social
institution, created by people in order to further
human flourishing. They have a moral role that
is an inescapable consequence of the fact that
they are simply collections of humans and human
knowledge. The ethical dimension of their activity
is fundamental to their identity.
This rediscovery among conservatives of the
wider contribution of businesses to society is
by no means complete. Scour David Camerons
speeches between 2005 and 2008 and you will
find many references to the importance of firms

showing social
responsibility and
contributing to the
creation of a
Big Society.

That refrain is much less

frequent over the last five
years because, inevitably,
the financial crisis changed
almost everything. The focus for
all politicians, understandably, switched
to the narrower and more urgent task of keeping
businesses alive and jobs in place. However,
in place of social value has been an equally
important rediscovery of ideas of enterprise
and entrepreneurialism as a counterpoint to
widespread popular concerns about big business
and corporate greed.
The debate raging over tax avoidance, whether
from major multinational corporations or political
donors, shows that even in hard times the ways
in which business contribute to the social fabric
of the nation is not understood simply in
economic terms.
This is undoubtedly territory that the left finds
more comfortable; their activists and politicians
have always found it easier to justify a vision
of business that goes beyond the pure bottom
line, and have been prepared to use both the
bully pulpit and regulatory cudgel to make them
recognise their social responsibilities. But the
priority given by both the Prime Minister and
the Chancellor, George Osborne, in the domestic
and international forums to clamping down on
tax avoidance where some drastic changes,
previously unthinkable just 5 years ago, have been
made in recent years shows that there really has
been a paradigm shift.
The consensus has changed. Yes, firms should
be hiring, creating, innovating, growing and
paying tax. But more than that businesses should
be setting themselves wider goals so that, in
pursuing their economic imperatives, they are
contributing to broader set of social objectives
that citizens value.

17 /

Elizabeth Rigby /

Deputy Political Editor, Financial Times

BUSINESS IN
THE MEDIA:

REFLECTIONS
AND PERCEPTIONS

d Miliband seemed to hit paydirt in

September when he pitched himself
as the politician who was on the side
of the little guy with a promise to freeze
fuel bills and tax big business more heavily
in his efforts to stand up to the strong.

Ordinary people are

now demanding that
their politicians make
sure the wealthy pay
their dues

While his Conservative rivals denounced him as

an anti-business socialist, they also scrambled to
respond. Less than month after the Labour leader
delivered his pledge to the British people, David
Cameron had put the coalitions green taxes
under review as he too sought to cut bills.
It is the latest salvo in a running battle between
politicians and business that began in the
wake of the 2008 financial crisis. Mr
Miliband captured the mood in 2011
when he sketched out his own
version of responsible capitalism
that set predators against
producers. The presentation
was clumsy but his political
instinct was spot on: Ordinary
people struggling to cope with
a decade of austerity are now
demanding that their politicians
make sure the wealthy pay
their dues.
This is a battle that has seen
several corporate casualties. The
City has faced extra taxation, chief
executives of several major companies
have been forced out, and politicians have
taken to naming and shaming global firms for
their tax affairs.
The growing hostility between the corporate
class and the ordinary worker is in part an
inevitable consequence of recession as the spoils
of capitalism dwindle, reminding a struggling

squeezed middle of the acute disparities of

wealth between a corporate elite and the rest.
But those tensions have also been fuelled by the
media.
The emergence of social media has created a
forum for resentments to gather steam note the
#boycottstarbucks campaign while the public
bail-out of Royal Bank of Scotland and Lloyds TSB
in 2008 catapulted finance from the business
pages of newspapers into the mainstream.
The scrutiny of banks and other big corporations
by lobby journalists has been brutal for business.
Financial journalists assessing the performance
of the big utility firms, banks or consumer goods
companies are sympathetic to the notion of
shareholder returns, dividend payouts and heady
incentive packages to attract and retain the best
talent. Their colleagues on the political news
pages are far less forgiving, and business has
been slow to adapt to that.
Big companies are kidding themselves if they
think this anti-business rhetoric will dissipate now
green shoots are poking through the soil. 2015
has already been dubbed the Living Standards
election, and politicians are now in competition for
policies that appeal to voters struggling in a postcredit crunch world, with Labour having thrown
the first blow and even the Tories launching an
assault on Rip-off Britain as they set down lines
of attack in what is set to be a bitter fight.
This time around business would do better to
prepare a pre-emptive strike.

19 /

Claire McCartney /

Adviser, Chartered Institute of Personnel and Development

BUSINESSES AND
THEIR EMPLOYEES:

THE HARDEST SELL?

f as a leader of any sort of organisation your employees dont share your

organisations purpose and sense of value then you might as well forget any
meaningful attempt to communicate it externally.
All too often employees perceive a mismatch between their own values and those
of the organisations in which they are working. This has real implications for
work performance and commitment. Indeed recent research from the CIPDs
quarterly Employee Outlook (2011) showed that 40% of employees dont
believe organisations values are worth the paper theyre written on.
But those organisations that manage to create a shared sense of
purpose and understanding around the social value of their businesses
outperform organisations that dont, on both soft and hard measures
(CIPD, 2010: Shared purpose: the golden thread?).
An employer brand is a set of attributes and qualities often
intangible that makes an organisation distinctive, promises a
particular kind of employment experience, and appeals to those
people who will thrive and perform to their best in its culture.
Every organisation has an employer brand, because it has a
reputation as an employer.
A strong employer brand should connect an organisations values,
people strategy and HR policies and be linked to the company brand.
The CIPD Guide - Employer branding: a no nonsense approach
(2007) identifies the four most important stages of building an
employer brand as:
DISCOVERY
Involves research to understand how the employer brand is perceived
by various stakeholders.
ANALYSIS, INTERPRETATION AND CREATION
Involves using research to help build a clear picture of what the
organisation stands for, offers and requires as an employer - its distinctive
value proposition.
IMPLEMENTATION AND COMMUNICATION
Sees the brand being applied for the first time in the organisation.
MEASUREMENT, MAINTENANCE AND OPTIMISATION
Concerned with checking progress and maintaining momentum.

Businesses which can follow these steps and not only define but live a shared purpose
and employer brand will stand a much greater chance of communicating their social
value to both employees and the wider world.
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Bringing Business Home /

Stephen Howard /

Chief Executive, Business in the Community

LEADERS AND
BUSINESS:

THE PERSONAL CHALLENGE

lmost 80% of Chief Financial Officers agree that environmental,

social and governance programmes add value to their business by
maintaining good corporate reputation and/or brand equity.

Integrating responsible business practice into a company can create

a happy and engaged workforce, improved operational effectiveness,
organisational growth and new business opportunities.
The companies we work with at Business in the Community approach
these issues in myriad ways, based around what makes sense for their
businesses. But there are some general principles we would always
recommend to leaders:

Integrating
responsible
business
practice into a
company can
create a happy
and engaged
workforce...

IDENTIFY YOUR UNIQUE

CONTRIBUTION

LEAD FROM THE FRONT AND

GET THE GOVERNANCE RIGHT

BE PREPARED FOR
THE FUTURE

Businesses do best when they

can demonstrate their unique
expertise in ways that chime
with their brand and stand out.

Chief executives who have a

personal passion for this agenda
are more likely to build it into the
corporate culture.

Marks & Spencer is

demonstrating its commitment
to circular economics by
asking customers to bring
unwanted clothes back to stores
so they can be resold, reused or
recycled its ultimate ambition
is to collect as many clothes as
it sells.

Leaders must find a way to

balance planning responsibly for
the long term with addressing
short-term issues and
stakeholder demands. Issues
of values and ethics must be
addressed and company cultures
built that promote responsibility
and positive impact.

B&Qs Street Club programme

has seen the retailer suggest
people share lawn mowers and
drills with their neighbours,
rather than each person
purchasing their own. This is a
scheme built around selling less
a clear demonstration to the
public that the company shares
its priorities.

You also need a clear

governance structure while
93% of CEOs believe boards
should discuss and act on social
and environmental issues, only
75% feel their boards are doing
so, according to a recent report
Business in the Community
published with Cranfield School
of Management.

By 2050, the worlds population

will be 9 billion. Is your business
thinking in the right way about
long-term issues like this and
others, such as increasing
resource constraints and
changing weather patterns?
These are challenges, but also
massive opportunities. All
companies have short-term
priorities and concerns, but
those which dont make the
time to consider how to build a
sustainable future risk seeing
their business model becoming
obsolete or untenable.
Corporate responsibility is
an ongoing journey, not a
destination. There is always
more a business can do
and ultimately it will be to
the benefit of the business
to do so.

Others lend their skills to the

community in appropriate
ways such as accounting
firms encouraging staff to
volunteer in roles which help
community groups.
21 /

Dorothe DHerde /

McKinsey & Company

GOING BEYOND
DOING WELL
BY DOING GOOD

Doing the right thing

requires real leadership and
a perspective, starting from
the top, that is broader
than maximizing
shareholder value

/ 22

Bringing Business Home /

ts becoming a clich. Corporations can succeed

in doing well by doing good. There is no
contradiction between being responsible and
being profitable. In fact, rather the opposite:
being good is not only a great way to win hearts
and minds (and headlines), but it can also unlock
shareholder value.
One problem with this idea is that the catchiness
of the phrase makes it sound easy and it isnt. A
second is that the phrase implies that the reason
to do good is to do well.

Honeywell decided to institute furloughs

during the 2008-09 recession, rather than
make massive layoffs. As CEO Dave Cote told
the Harvard Business Review, not only did
many employees naturally prefer temporary
unpaid leave to unemployment, but the
company kept its human expertise. Recent
research suggests that companies that were
the most aggressive in cutting jobs reported
lower returns than their peers.

Mining giant Anglo American began a

comprehensive AIDS prevention and treatment
program in South Africa a decade ago that
may be the largest such corporate effort in
the world. Anglo American reports it has
benefited in the form of lower absenteeism
due to sickness. But the larger benefit is surely
that it has built trust between company and
community by saving lives that help to knit
together the social fabric.

Novo Nordisk is a large Danish health-care

company whose business mission is to help
patients lead better lives. The company sets
and monitors measurable environmental and
social targets, such as reaching 40 million
diabetes patients by 2020, or reducing
wastewater. In 2012, Forbes called it the most
sustainable company on earth. And its
financial performance part has also been solid:
revenues have more than doubled over the
past decade.

Even in the absence of regulations, consumer

pressure, or a business case, I believe that
companies should seek to do the right thing
simply because it is right.
Doing the right thing requires real leadership
and a perspective, starting from the top, that
is broader than maximising shareholder value.
Companies are institutions in society; people
shouldnt leave their citizenship at the door when
they go to work.
Thats not a complicated idea; nor is it a new one.
When the happiness or misery of others depends
in any respect upon our conduct, wrote Adam
Smith in 1759, we dare not, as selflove might
suggest to us, prefer the interest of one to that
of many.
Our own managing director, Dominic Barton, puts
it in this way: Business needs a communitys
licence to operate within it, and it will only get this
licence if its operations benefit that community.
This kind of orientation requires taking a longterm view. In practice, that means that companies
must steward their resources, rather than simply
extracting value from them; foster a sense of
citizenship and loyalty that attracts quality people;
and scrutinize practices and policies that might
encourage people to take ethical short cuts for
the sake of the bottom line.

The idea that companies can do well by doing

good strikes me as commendable, but limited. It
sounds too transactional, almost clinical. Its wiser
to accept that virtue is often its own, and only,
reward. When it does bring tangible returns, thats
a particularly satisfying bonus.

23 /

BUSINESSS COMMUN
TROUBLE: HOW BAD
ComRes has conducted extensive research across
Britain citizens and MPs to gauge feeling about how
people see the value of business today.
Three findings stand out:
Regardless of their own
views, people feel like
the mood around them
is worsening

People feel they ought to think

about a businesss work for the
environment and charity more
than they actually do

Both MPs and the public express

a range of nuanced views about
different sectors or businesses,
but they tend to report that, in
their view, the general mood in
the UK is getting more negative.
72% of MPs report their
constituents are a little or a lot
less trusting towards business
than they used to be; 67% of the
public say trust has declined in
the last five years.

Classic CSR policies get a

polite reception when people
are confronted by them - from
a list including charitable
donations and environmental
policies people will cite them as
important. But very few people
will say that these issues matter
without being prompted.

There is a sense that MPs feel

less angry than they believe
their constituents do, and the
public feel that their friends and
neighbours are more negative
than they are themselves.
Clearly such a statement cannot
be true for everyone, but it
demonstrates how the overall
atmosphere makes it difficult for
business to move opinion on a
broad scale, even if individuals
can be persuaded.

This is important because so

much corporate resource is put
into CSR, an investment often
if not always sold internally
on the basis of external
reputation (along with the
commendable desire to support
worthy causes). What the data
suggests at the very least is that
businesses need to think more
about whether support for good
causes on their own, outside
a broader narrative, can bring
them any reputational benefit.

ComRes interviewed 2,015 GB adults online between 29th and 30th May 2013. Data were weighted be gender, age and region to
be representative of all GB adults aged 18+. A bespoke online qualitative group was hen conducted with 30-40 GB adults, between
4th and 10th June 2013. ComRes also conducted a snap poll of 50 MPs online (22 Labour, 21 Conservative, 4 Liberal Democrat
and 3 from other parties) between 29th May 2013 and 5th June 2013. Due to the small sample size, the survey is not weighted to
be representative of the House. ComRes is a member of the British Polling Council and abides by its rules. Full data tables can be
found at www.comres.co.uk

/ 24

Social Value of Business /

Portland

NICATION
IS IT?

Personal experiences of what a

business is about matter more
than anything
We already knew that people form
a view of businesses based on the
products they consume and the
service they receive. What the new
data suggests is that people are
more likely to hold a high opinion
of their own employer than of
business in general, and more likely
to hold a favourable opinion of
the businesses that employ their
friends or family.
There is an obvious explanation
for why people feel better about
the people that pay their wages,
or those of people close to them.
But there is almost certainly
something more at play here.
People inside an organisation tend
to feel some sense of what that
organisation is for and what it
aims to achieve, beyond pursuit of
profits. They also get to appreciate
part of the sometimes unspoken
value of a business, in that they
experience personal investment
and development that comes
with work. And finally, this finding
might be evidence of the power of
advocacy word of mouth between
real people, and representation
with a human face.

25 /

THE SITUATION IS POOR AND GETTING WORSE

Dislike of business is
consistent and largely uniform...
Favourability by sector and gender

55% 36% 53% 63% 41%

Car manufacturing

Banks

Pharmaceuticals Supermarkets Mobile phone

64% 36% 53% 63% 42%

Think business
is too focused
on big profits

46% 49%
PRIVATE

sector
employees

PUBLIC

sector
employees

33% 42%
In the
SOUTH
EAST

In the
NORTH
EAST

Find large firms

trustworthy

And everyone thinks

things are getting worse

72%

67%

MPs

PUBLIC

Think levels of trust in

business have decreased
in the last five years

Perceived greed seems to be most

common, but not the only explanation

Without business we would have

no economy

Proportion of people who associate

business with the following phrases:

49%

44%

Businesses have no role as such

They dont owe us anything

14%
When businesses pay their taxes
they also support the economy

I cant emphasise enough that

[businesses] are essential but in no
way altruistic

/ 26

Social Value of Business /

Portland

Socially
responsible

Good for
Britain

Too much focus

on making big
profits
(to describe
British business)

SOME FACTORS MAKE A DIFFERENCE TO HOW BUSINESS IS SEEN

64%

trust businesses with

36%

say the same about

fewer than 50
employees

1000+ people firms

Nationality

Size

Things you cant easily change

Big businesses see profit margins as

the driving force above all else

28%

51%

say businesses
which operate in
the UK and other
EU countries, are
trustworthy

say businesses which

operate worldwide
and have their
headquarters
abroad, are
trustworthy

say businesses
which operate
worldwide from a
base in the UK are
trustworthy

The small businesses like ours [are] created to serve

a need in the community whilst making a living

The fundamentals of your business

96%

94%

79%

of MPs say
their experience
as customer
inform their
views as a
business

of the public say

customer
service is
important in
informing
whether they
trust a
business

of the public say

price or value
for money is
one of the top
three factors in
deciding
whether to
buy goods or
services

51%

Throughout its operations a business

should be committed to ethical
behavior and the contribution to
economic development while
improving the quality of life of the
workforce and their families as well
as of the local community and society
at large

43%
of the public say
reliability is in
the top three
factors

I love small local business and try to

support them. They offer personal
service, offer better customer care and
support our local economy

The wider contribution

78%

70%

70%

67%

78%

of the public say

working
conditions

of the public say

how a business
treats the
environment

of the public say

how a business
treats its
suppliers

of the public say

how much tax a
business pays in
the UK

of MPs say
how much tax a
business pays in
the UK

80%

of people aged
65 or over

60%

of 18-24
years old

Inform their views

of a business

Believe tax is
important to their
view of a business

A sense of local presence

59%

of the public associate

businesses in their
local area
with performing an
important role by
providing services

86%
of MPs say the
same of
businesses
in their
constituency

18%

of the public say

businesses in the
local area are too
focused on making
big profits

27 /

Oliver Pauley /

Partner, Portland

CONCLUSIONS:
BUSINESSES
AND THE NEW
REALITY

/ 28

Bringing Business Home /

BUSINESSES ACTIONS ARE JUDGED ON

THE BASIS OF THEIR REPUTATION, NOT
THE OTHER WAY ROUND
For those charged with protecting businesses
reputations, the world has changed permanently. The
combination of the financial crisis and the explosion
of social media has created a new landscape where
corporate narratives are harder to define and control
and reputation matters more than ever.
What weve tried to establish with our partners
ComRes is not how bad things are, but what the
underlying changes in the external environment really
are and how to adapt.
The results are interesting in several ways, but one of
the major themes that emerges is that regardless of
peoples own opinions, everyone gets the sense that all
around them, attitudes to business are at rock bottom.
MPs believe their constituents are angry; newspaper
editors assume their readers are angry.

The combination of the

financial crisis and the
explosion of social media
has created a new landscape
where corporate narratives
are harder to define and
control and reputation
matters more than ever
In some areas, notably executive pay, there appears to
be an unbridgeable gap: there is simply not currently a
societal consensus on what level of pay is reasonable
or how it can be justified. But in other areas, there
appears to be an appetite for business to play a more
active role in society, and an innate understanding
in personal experience of the complex web of
relationships that connect businesses to their societies.

HOW WE GOT HERE

The excesses of the mid-nineties to the early noughties
drew a range of criticisms about how business
conducted itself. However, their effect on the business
community was limited for two reasons.

First, major protests against specific businesses or

against globalisation were limited to a fringe of public
opinion the rock-throwing turtles in Seattle never
threatened to generate a broad base of support.
Second, the elements of corporate behaviour which
were most criticised were environmental, or when they
spilled over into economics, were those that impacted
on the developing world.
In terms of the general political mood, from the
doorstep to the Commons Committee Room, business
could get on with business. This changed with the
crash. From 2008-09 businesses, which previously
would only have been impacted if a major scandal
struck, have struggled to rise above the fray.
The old issues still matter climate change and
developing world labour standards are still real
concerns for many. But inevitably at moments of
economic contraction the focus falls most harshly
on the fundamentals of what business does and how
it does it. The crash brought the externalities that
businesses can create much closer to home, which has
understandably led to increased scrutiny and a higher
profile for business issues.
This particular economic dip has been unusually bad
for businesss standing. The UK has avoided the mass
unemployment, high inflation and interest rate spikes
of previous recessions, but has experienced a gradual
tightening in living standards. This has exacerbated
the focus on the value offered by businesses and the
fairness with which they treat customers.
Meanwhile, the Coalitions emphasis on reducing the
deficit has drawn corporations into the spotlight, with
government ministers quite happy to question whether
they are paying not just their legal obligation but
their fair share. And while they are doing so, they are
expected to help build the road back to prosperity. So
people are looking to businesses to demonstrate long
term investment and commitment and are unforgiving
of anything that looks like short term profiteering.
29 /

THE SITUATION TODAY

What this adds up to is a loss of businesss licence
to operate.
The past year has seen major brands having to
face difficult questions from the public, media and
parliamentarians. The reaction can quite quickly slip
from distrust or criticism into genuine anger.
It is this anger that is most difficult to deal with.
Politicians are well used to their efforts being greeted
with jeers of derision, and plan their communications
strategy accordingly. Business has not yet made
that transition.
In short, then, the environment both for business as
a sector of society, and for individual businesses, is
harder than it has ever been. But we can see a few
pointers to the way forward.

THE WAY FORWARD

Reputation lives in narrative
In the media and in general public opinion, businesses
actions are judged according to their reputation, rather
than the other way round.
This is a truth familiar to politicians. In the depths
of Opposition, the Conservative Party famously
found that focus groups would approve of policies in
principle but reverse their position when they found
out that they were Conservative policies voters were
judging policies based on which party promoted them,
not judging parties on the basis of the policies they
promoted.
In the same way, audiences can completely discount
events for some businesses that would have
plunged others into reputational crisis and whether
businesses get away with it when they fall short is
not a matter of dumb luck it depends on whether
they are in control of their narrative. And this has real
impacts: an organisation whose standing is gradually
undermined will one day find itself too vulnerable to
stand up to a competitive or regulatory threat.

Every business,
even with the most
rudimentary internal
communications
strategy, must ensure its
employees are willing and
eager to work for it
Tell the right story
One of the big findings from the ComRes research was
that people are generally better disposed towards their
own employer than they were business in general and
intriguingly they felt even more favourably towards
businesses that employed their friends or family. It
may of course be that this is entirely down to the wage
packet. But this seems unlikely.
Every business, even with the most rudimentary
internal communications strategy, must ensure its
employees are willing and eager to work for it. Unless
the sole means of achieving this motivation is payment
(and undoubtedly in some cases it will be), then
workers must have some understanding of their place
in a broader mission.
The sort of narrative that works for this internal
audience will often be based around investment in
people, development of careers, opportunities for
growth and the web of relationships that exist with
the world beyond. At its best it goes beyond a simple
description of what the business does (or what it sells)
and says something more about what the business
stands for.
Many businesses have invested heavily in their external
brand, but as Claire McCartney of the CIPD points

/ 30

Bringing Business Home /

out in this document, the employer brand needs its

own development and nurturing. Good employees
ultimately make a successful company, and this is who
will assist in framing the right story to the wider world.
Communicate through a network, not a megaphone
The fact that people react better to businesses they
hear about from friends and family than businesses
in general and indeed their own employer tells us
something about the way reputations spread and are
magnified. Social media has taken word of mouth and
magnified its effect exponentially.
So a business communication strategy needs to
harness advocates and friends to provide the right sort
of endorsement.
It also needs to have a realistic digital strategy: very
ambitious plans for viral distribution of positive
messages often fall well short of the intended effect.
But rapid, honest tailored responses to peoples
concerns go a long way to demonstrating that a
business that cares what people say, even if
they disagree.
Authenticity matters, and you cant fake it
The most successful brands stand for an ideal or
purpose beyond the physical product or direct service.
The same is true of a corporate reputation. A business

must stand for something in the minds of people it

seeks to influence.
But there is more to this than picking a few aspirational
values and constructing a strategy to convince the
world that you live up to them (try Googling Enron
values). There are communications strategies that
work with the truth of what a business is about, and
there are PR efforts that try to present a positive story
to cover over the real nature of the people behind it.
The latter seldom work. Where they do, they tend to be
very short lived.
For that reason, businesses looking to convince the
world of their value need first to be clear they can
convince themselves. If a quick straw poll of colleagues
as to the purpose or values of the organisation does
not elicit the answer you are looking to promote, it
probably needs more work.
Leadership matters
Businesses need a human face, a leader to articulate
values, ambitions and strategy, who is prepared to
stand up when things go wrong. That person cant have
communications on their card but they need trusted
comms professionals to help them plan and execute
the strategies that will help them get control of their
narrative and connect with their audiences.
31 /

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