Business Need Not Fear Obama--Anymore

With uncharacteristic prescience, I wrote in Broadcasting & Cable Magazine in December 2008 that the big business community had nothing to fear from an Obama presidency. While it has taken almost two years, and a few public chastenings, it seems that Obama is doing what it takes to reassure the corporate sector that he is a friend, not a foe.

As he crosses the Lafayette Park Rubicon to speak with the U.S. Chamber of Commerce, there may be no turning back. After breaking bread with Tom Donahue and the corporate titans he represents, Obama has cast his future lot with business over labor. While this may be a masterfully necessary move for the adroitly pragmatic Obama, it may not be sufficient for the Chamber to abnegate the hundreds of millions it will pump into Congressional races next year.

These political considerations aside, here is why business need not fear Obama, anymore.

Acumen over Antagonism, Results over Retribution

For all of the campaign bluster blaming big business for American economic woes, Obama is not and never has been an anti-corporate crusader. He is much more interested in results than retribution. Obama’s key economic appointments suggest his administration will pursue acumen over antagonism when it comes to the business sector. The designation of Daley as chief of staff says it all.

Deal-Making over Dogma

If Obama has proven anything, it is that he is an uber pragmatist who prefers practical solutions over dogmatic ties to political philosophy. While business may have taken solace in the mainstream Republican ideology, it will be surprised at how non-ideological Obama may prove to be. After all, he has shown a willingness to borrow from the best of conservative, liberal, progressive and libertarian thinking in the development of his own unique world view. His commitment to success will compel him to think and act far outside the constraints of predictable political dogma. His call to review anti-business regulations is the height of mid-stream correction.

Balancing Commerce and the Constitution

More than any other president before, save Thomas Jefferson and James Madison, Barack Obama is acutely aware of both the expanse and the limitations of government power. His facility with constitutional law may be unparalleled in American presidential history. As a constitutional scholar, Obama knows, or should know, the balance that must be struck between permissible government regulation of business, trade and commerce on the one hand, and the light touch of regulation on the other that fuels innovation and investment in the marketplace. Above all, he should appreciate the wide swath that the commerce clause of the constitution cuts through our lives and should direct his cabinet and his erstwhile Congressional cohorts to err on the side of less—not more—government regulation.

In the area of commercial marketing and advertising, for example, a string of successive Supreme Court decisions have struck down burdensome restrictions on commercial speech as impermissible under First Amendment jurisprudence. The president-elect should recognize that heavier regulation in that sector, alone, will mean less revenue for many, many industries.

It will be important for the President to send clear, unambiguous signals to his fellow Democrats in Congress that he expects them to treat business with prudence and pragmatism, and cooperate with the House Republican leadership. He must develop a better working relationship with Energy and Commerce Chairman Fred Upton (R-MI) and stalwart committee members Joe Barton (R-TX) and Cliff Stearns (R-FL), if any reasonable headway is to be made.

Of course, as with any other administration, the business community will have its differences and spates with Obama. The healthcare law overhaul is a mixed blessing for business, but the principle remains anathema to the GOP. Reducing regulation remains the Republican mantra, especially following remembrances of Ronald Reagan's 100th birthday

Whatever the issues that will bring business and Obama face-to-face, I would bet that the president's goal every time will be to carve out a win-win scenario so the public good does not obstruct the gains of the private sector. Last but not least, all indications are that Barack will challenge big business—as he has challenged us all—to become its best; to live up to higher standards and ideals, and to contribute to society and humanity in a way that it has never done before. Such an outcome surely would profit our nation and the dividend would go directly to the bottom line.

(c) Adonis Hoffman 2011

Quality and Transparency Help Corporate Reputation

Not surprisingly, the more open and trustworthy a company is, the better its reputation. According to an annual survey, only 45% of Americans trust business. This is a decline from previous years where more than half of Americans had greater faith in the corporate sector. The proliferation of negative news reports and the availability of more information on the activities of big corporations, apparently are contributing factors.

With the advent of "information ubiquity", the primary way a company can maintain or improve its sterling corporate reputation is to provide quality, become more transparent, ensure employee welfare, and be more trustworthy. Of course, this mandates more, not less, communication across various platforms for CEOs and other business leaders.

In the U.S. 85% of "informed publics" aged 25-64 believe corporations should create shareholder value in a way that aligns with society’s interests, even if that means sacrificing shareholder value. Another 61% believe government should regulate corporations’ activities to ensure business behaves responsibly. The U.S. is surpassed only by Germany, the U.K., Ireland and (surprisingly) China in these opinions.

For much greater detail, check out the Edelman Trust Barometer, a useful study of how well-informed people across the world feel about business. Thanks Edelman.

Marriott Rejects Porn

Congratulations to the Marriott Corporation for its decision to not broadcast adult-oriented movies in its hotel properties in the future. As reported in the media, this move will affect over 600,000 rooms throughout the system when Marriott changes from the current in-room video offerings to an Internet based, video-on-demand, system.

As one of the world's most identifiably wholesome hotel brands, we would expect nothing less from Marriott. I know many families, including ours, that build their vacations around Marriott hotels because it engenders an environment in which kids of all ages feel welcome and included.

I don't know how much money will be lost from this decision, but the benefits in corporate reputation and business leadership will far outweigh the costs.

50 Excellent Lectures for Business

Having just been informed of this site, I wanted to pass it along to you right away. Excellent Business Lectures

If you are interested in entrepreneurship, business leadership and technology, you will enjoy the presentations by corporate execs, academics and visionaries.

Lessons from Bank of America

Widely honored for its corporate philanthropy and community involvement, Bank of America suffered a reputational setback when it admitted to the Justice Department that it had engaged in a conspiracy to rig bids in the municipal bond derivatives market. Story here.

To its credit, the Bank stepped forth willingly to report its misconduct and was granted leniency as part of the Justice Department's Antitrust Corporate Leniency Program. Nevertheless, Bank of America must pay $137 million in restitution.

Going forward, it helps the Bank that several employees were convicted of wrongdoing, and the abuse was not widespread. Nevertheless, this case points up the importance of strong financial controls and accountability--even for the most responsible corporate citizens. It also points out the importance of immediate remedial action by a corporation, once it discovers bad behavior.

(c) 2010 Adonis Hoffman

Hooray for Huggies

It has been a long time since my two kids were in diapers, so I do not pay attention to anything remotely related to babies' bottoms. Thus, although it is not a new story, I was surprised and impressed to learn that Huggies has a national campaign which donates diapers to needy families. The background is here.

Huggies, of course, is a well-known brand of disposable diapers made by Kimberley-Clark. The arrangement seems to be simple and straightforward: for every diaper purchased by consumers, Huggies will donate a diaper to a designated diaper bank in the U.S. Needy families can go to a diaper bank and receive ample supplies of clean, new, disposable diapers.

Why is this so good?

Apparently one in three moms in America cannot afford to buy enough diapers for their children. Most daycare centers require a full day's supply of clean diapers. If a family cannot provide the required complement of diapers, the child cannot attend daycare. Beyond that, a recent study found that many needy moms throughout America are washing and re-using disposable diapers because they cannot afford fresh ones. Yes, in America, this simple convenience escapes many in need.

Huggies campaign to meet this need by allowing customers to contribute and participate suggests a level of corporate responsibility not manifest in many organizations. The company saw a need, and designed an innovative, simple solution that goes a long way to solving the problem.

To be sure, the cynics among us will point out that Huggies is in the business of selling diapers, and the more goodwill they develop through this campaign will help them sell more diapers. Well, yeah. In a capitalist, free-market economy, the first order of business is to profit. If a company can master that feat, it can turn its attention to helping society by combining its core business with a good cause.

It seems the folks at Kimberley Clark and Huggies have mastered this balance. They have done well and are doing good. Hooray for Huggies.

(c) 2010

Fighting Hunger in America the Wal-Mart Way

Almost everybody has a big, bad Wal-Mart story that disses the Bentonville, Arkansas chain store for one reason or another. From the everyday low wages it pays to its associates to the arm-twisting pressure it puts on suppliers to wring out the absolute lowest price, Wal-Mart is notorious for its bare-knuckle business practices. As defendant in one of the biggest class-action discrimination cases brought on behalf of women in the workforce, Wal-Mart also is no stranger to damning media reports that question whether it hurts the little people its business is devoted to serving more than it helps.

To its credit, Wal-Mart has addressed many of these claims with remedial programs that focus on the underlying problem. While its journey to corporate citizenship has been dismissed by activists as self-serving, Wal-Mart has found that doing good leads to a better reputation. But it has not been easy or quick.

Thus, it is not insignificant that Wal-Mart has announced perhaps the biggest private effort in history to fight one of America's most embarrassing ills: hunger. The $2 billion commitment to fight hunger demonstrates that Wal-Mart has its finger on the pulse of America's problems. As much as jobs, the economy or taxes may be on the agendas of politicians, it is a sad commentary that hunger is a more pressing problem for millions of Americans.

Kudos to Wal-Mart for recognizing and understanding this basic human need, and even more props for taking the steps with partnering organizations to do something about it.

(c) 2010. Adonis Hoffman

Better Business Bureau Needs Oversight Following Charges of Pay-to-Rate

The Better Business Bureau could benefit from tighter government oversight following recent allegations that it has maintained a pay-to-rate scheme for years.

For decades, the Better Business Bureau has been the gold standard for the validation of solid business practices. We all rely on the BBB's ratings system to determine whether a company is worthy of our dollars or not. To learn now that the BBB might have been scamming us all this time is heartbreaking. If these charges are true, it is betrayal at the most basic level. If these charges are true, and I hope they are not, the Federal Trade Commission needs to take a long hard look at how to cure the damage that has been done to consumers.

The other problem here is that the Better Business Bureau manages several industry self-regulatory schemes. These include the very successful program guarding children's advertising to the newly-developed program to monitor the marketing of so-called junk foods by 16 of the top food and beverage manufacturers, and the monitoring of infomercials. While those programs are self-contained, the BBB's actions cast a very dark cloud over the practice of self-regulation altogether.

In the interest of consumer confidence, the FTC needs to take a much closer look at the BBB--a consumer icon that may have fallen on the wrong side of the ethical line.

(c) 2010. Adonis E. Hoffman

Are We Putting Undue Burdens on Business to be Socially Responsible?

Does Society Expect Too Much from Corporations?

Corporations need to re-think how they are doing business today if they want to stay in the good graces of customers, investors and the government.

It is not enough for companies to be competitive and do well. We also want corporations to help protect the environment, build roads, fight corruption, advance human rights, support the arts, contribute to local communities, compete globally, and create immense shareholder value, all at the same time.

While these are real concerns, the expectations may be a bit too high. After all, the main duty of a corporation is to provide a quality good or service and return a reasonable profit to its shareholders. If they can find a way to do that, and be socially responsible too, they will be rewarded in the marketplace, but it is not easy.

Among the companies who have balanced these challenges successfully, I cite the following:

Microsoft; Wal-Mart; Exxon-Mobil; Chevron; General Motors; Conoco Phillips; Ford Motor; Citigroup; Bank of America; ATT; JP Morgan Chase; HP; IBM; Valero Energy; Verizon; McKesson; Procter & Gamble; United Health Group; Kroger; Boeing; Target; State Farm; Well Point; Marathon Oil; United Technologies; 3M; Aetna; the Walt Disney Company; Home Depot; Johnson & Johnson, and Marriott.

My new book, Doing Good--the New Rules of Corporate Responsibility, Conscience & Character lays out 55 simple, easy-to-follow rules for CEOs and business leaders to succeed amids the new challenges of today's global marketplace in the areas of ethics, governance, citizenship, philanthropy, diversity, privacy and public policy.

Balancing these competing expectations remains a daunting challenge for many corporations, but with focus and commitment, they can succeed.

(c) Adonis Hoffman

2010

ISO Publishes New International Standards on Social Responsibility

On November 1, 2010, the International Standards Organization (ISO) launched ISO 26000, a long-awaited guidance for business and public sector organizations on social responsibility (SR).

ISO Secretary-General Rob Steele commented: “The publication of ISO 26000 is eagerly awaited by organizations worldwide, whether they are business enterprises, or public sector organizations. Operating in a socially responsible manner is no longer an option. It is becoming a requirement of society worldwide. What makes ISO 26000 exceptional among the many already existing social responsibility initiatives is that it distils a truly international consensus on what social responsibility means and what core subjects need to be addressed to implement it. In addition, it is based on broad stakeholder input, including from developing countries, business, government, consumers, labour, nongovernmental organizations and others.”

According to the standard, the perception and reality of an organization's performance on social responsibility can influence, among other things:

• Competitive advantage
• Reputation
• Ability to attract and retain workers, members, customers, clients or users
• Maintenance of employees' morale, commitment and productivity
• View of investors, owners, donors, sponsors and the financial community
• Relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates.

The development of ISO 26000 began in 2005; it is the work of the ISO Working Group on Social Responsibility (ISO/WG SR) whose membership was the largest and the most broadly based in terms of stakeholder representation of any single group formed to develop an ISO standard.

Six main stakeholder groups were engaged: industry; government; labour; consumers: nongovernmental organiza tions; and service, support, research and others, as well as a geographical and gender-based bal ance of participants.

It was made up of experts from ISO members (national standards bodies – NSBs) and from liaison organizations (associations representing business, consumers or labour, or inter-governmental or nongovernmental organizations).

At the last meeting of the ISO/WG SR, in July 2010, there were 450 participating experts and 210 observers from 99 ISO member countries and 42 liaison organizations involved in the work, including the United States.

ISO 26000 provides guidance for all types of organization, regardless of their size or location, on:

1. Concepts, terms and definitions related to social responsibility

2. Background, trends and characteristics of social responsibility

3. Principles and practices relating to social responsibility

4. Core subjects and issues of social responsibility

5. Integrating, implementing and promoting socially responsible behaviour throughout the organization and, through its policies and practices, within its sphere of influence

6. Identifying and engaging with stakeholders

7. Communicating commitments, performance and other information related to social responsibility.

ISO 26000 is a voluntary guidance standard that is not to be used for certification, unlike other ISO standards.

This is a major step toward global standards for acceptable corporate behavior and should be monitored closely by every major corporation throughout the world.