8 minute read
As consumers and asset owners are becoming more sustainably minded they are increasingly looking for providers (brands) that match their values.
Read: The US Association of National Advertisers – Theory of Brand Culture
Key points:
- The theory of brand culture suggest that consumers want to feel affiliated with and be part of a brand – and it must be authentic.
- A brand can operate like a culture, defined by anthropologist Clifford Geertz as ‘… a system of inherited conceptions expressed in symbolic forms by means of which (humans) communicate, perpetuate and develop their knowledge about and attitudes towards life’.
- A culture has a core set of values, a way of seeing the world and a way of acting in the world – brand culture proposes that a brand can operate in a similar way.
- By communicating their values, a brand allows consumers to measure those values against their own, and find a close fit – i.e., a culture they wish to join.
- Today’s consumers are highly concerned with supporting brands that agree with their personal values.
- A brand is no longer just about products and services – a brand needs meaning – meaning which is consistent through the brand’s experiences.
- Brand culture cannot be faked, it must be real.
- Building a brand culture requires an internal process of articulating the brand’s values in a form that can be wholly embraced by employees, leadership, and customers.
It is not just customers and potential customers who actively want to feel affinity with a brand that they engage in. Corporate culture plays a key role in motivating and retaining employees.
In Marketing 3.0, Philip Kotler writes:
“… corporate culture is about integrity. It is about aligning the shared values and common behavior of employees. In the context of the forces at work, corporate culture should be collaborative, cultural, and creative. It should transform the lives of employees and empower employees to transform the lives of others. By building their integrity, companies can compete in the talent market, improve productivity and the consumer interface, and manage differences. Marketing its values to employees is as important as marketing the mission to consumers.”1
Defining culture – authentically
Understanding and defining a brand’s culture is often easier said than done, and authenticity is key. In the digital age, the availability of information means that brands have to be very careful indeed to live up to the values they promote externally. Claiming to have a set of values that are not in fact lived by is a very dangerous game, not only as it relates to sustainability. Investors, especially in the institutional space, have long memories when it comes to reputational issues.
Defining a brands culture can be a daunting task from within. It can be difficult to distinguish the culture and values a business would like to have/ have on paper, from the reality of the situation. It is important to remember that what a business is trying to achieve and that their long-term goals are as important to the brand identity as what they are capable of achieving today. This is something that B Corp (more detail in Module 5) takes great care to emphasise – the focus on positive change.
Aside from the day-to-day practicalities of working within a business, many brands are now starting to think more broadly about the stakeholders they serve. Moving from a model of shareholder capitalism to one of stakeholder capitalism (see Module 1). Identifying those stakeholders and their needs, and what a business can do to meet those needs, is a big step towards articulating brand’s values.
Read: McKinsey & Company – From principle to practice: Making stakeholder capitalism work
Key points:
- Stakeholder capitalism goes beyond traditional concepts of shareholder value, that were focused on creating value for the owners (shareholders) of a business, to a concentration on creating value for a wider group of stakeholders, including customers, suppliers, employees and communities.
- In this context, value is defined in broader terms rather than simply profits and returns.
- There is evidence that embracing stakeholder capitalism can have a positive impact on both reputation and performance.
- Stakeholders can be thought of as falling into three broad categories:
- Internal company stakeholders
- External stakeholders who directly interact with the company
- External shareholders who set the operating environment
- McKinsey has identified five dimensions of stakeholder impact:
- Financial and operational – relating to improving the stakeholder’s long-term financial well-being
- Environmental – relating to a company’s waste, pollution, emissions, land use, consumption of natural resources, and any other ways its operations impact environmental health
- Health and well-being – relating both to the organisational health of a company and the personal well-being of individuals
- Capability-building – relating to improving stakeholders’ abilities and skills
- Satisfaction impact – relating to improving stakeholders’ experience of interacting with a company, its products or services
- Stakeholder reporting lacks standardisation. There are a number of initiatives across the globe that are attempting to address this in local markets
- Embedding a stakeholder ethos in a company’s statement of purpose can help to ensure that a wide range of stakeholders are kept in mind.
Watch: Harvard Business Review Editors- Walk the talk of Stakeholder Capitalism
Key points:
- In the current environment of climate crisis, recurring periodic financial crisis and the recent global health crisis, we need to look for a new form of better functioning capitalism
- Shareholder capitalism starts with the idea that only business creates value, and that business creates value best when it is maximising share prices and value for shareholders
- Stakeholder capitalism starts with the idea that wealth is created collectively by different types of organisations – in order to ensure that wealth is evenly distributed/ redistributed between all these contributing parties, we need to look at improving working conditions, and serving our communities and our planet
- There are different ways to walk the talk of stakeholder value:
- See things differently – recognise how the success of a company has been, is and will be reliant on the collective effort and name check all those different relationships that have been part of their success
- Do things differently – for example drug companies being willing to sign up to patent pools to enable more rapid and widespread development, and committing to lower prices to facilitate access
- Collaborate differently – true problem solving requires collaboration across sectors to meet a challenge – what can we learn from the moon landing mindset (the concept of different entities pulling together for a common cause)?
- Redistribute wealth differently – if companies care about stakeholder value, they have to begin with how wealth is created in the first place. The rewards of collective efforts need to be distributed in a way that reflect the value creation process
1Kotler, P., 2013. Marketing 3.0. Hoboken, N.J.: Wiley, p. 83.
