2018 Beauty of Sourcing with Respect Conference: Opening Keynote

UNION OF ETHICAL BIOTRADE 2018 Beauty of Sourcing with Respect Conference

Opening keynote by Anne Bahr Thompson

Thank you, Rik. It’s an honor to be here today helping to kick off this conference.

In all kinds of businesses today, the traditional producer–consumer relationship is giving way to an exciting partnership between people and companies – one that will continue to evolve. It’s not hard to suppose that, at some time in the not too distant future, either pressure from advocacy groups or innovation from individual companies and whole industries will lead to a new kind of corporate system.

Close your eyes for a moment. Imagine walking into a grocer, a chemist or even your favorite clothing store in 5 years. As you look at the shelves, peruse items on the counters, or even flip through clothing on the rack, imagine how your choices might be different if the packaging on the food and cosmetics, or tags on the clothing listed more than the ingredients, nutrition and materials used to make these goods. Imagine if all these product labels included a standardized rating that helped you to compare how much energy and water were used in making the product, how ethical the manufacturer’s supply chain was, and how much of its profits the company contributed to good causes.

As this picture of our future manifests, companies across industries and of all sizes are looking inward at their production processes, supplier relationships, waste production, and much more, as well as outwardly at what matters most to people, in order to effectively develop their brands. Today, it’s more necessary than ever for companies to be committed to responsible business practices and identify the social and environmental issues that matter most to all their stakeholders, not just investors.

Yet, even with this vision for the future, if anyone had told me 10 years ago that I’d be speaking to professionals focused on ethical biotrade, I would have said, “That would be amazing, but there’s no way that will ever happen. After all, I’m a brand strategist.”

How I’ve ended up here today is not the result of something well-planned – or because I adhered to a linear path. It is the outcome of following data, synthesizing socio-cultural shifts, and trusting my intuition. All of which helped me to identify seven years ago that people were demanding business acknowledge it is an influential part of our social and environmental ecosystems, not only the economy. That a brand can only ask customers and employees to advocate for it, if it first advocates for the things that matter most to its customers and employees.

At the end of 2011, my company, Onesixtyfourth, fielded a quantitative study in the US and the UK to identify trends for the coming year. The learnings from this study were unexpected and so important I couldn’t ignore them.

Using a combination of open-ended and multiple-choice questions, we asked people about their hopes and dreams for the coming year, the things they feared, their outlook for the economy, and a variety of other questions, as well as to name the brands they thought would exhibit leadership in the coming year and the brands they identified as good and bad corporate citizens.

Rather than having the answers coded by a field house, my team and I read all the responses and compared their answers against one another. This enabled us to gain a feeling for sentiment and connect things in ways that we would not have been able to if the data had been coded.

In doing this, we uncovered a much larger story than the one I had set out to write. People had a lot more to say than I expected. If you think back, you may remember the end of 2011 was another election year in the US. One in which bipartisanship was very strong – albeit not as strong as what we are witnessing today. People were being told the economy had turned around. Yet most weren’t feeling this. Rather than listing the more typical New Year’s resolutions like lose weight or quit smoking as the things they hoped to do in 2012, many referenced more important and fundamental wishes. It was as if they needed a place to vent because of the insecurity and uncertainty they were feeling about the economy and global events. People told us things like:

  • I plan on spending very little in 2012; I will only use cash and we’ll have no vacations.
  • I hope that I’ll be able to complete college.
  • To stay safe from crime.

For survey participants in both the United States and the UK, goals such as “keeping my head above water, maintaining my lifestyle, keeping my job, and keeping my house” had become aspirations instead of things taken for granted. Uncertainty about the economy, combined with the perceived absence of inspiring leadership, had increased their anxiety levels and made them insecure about their futures.

When we asked about brands they thought would demonstrate leadership in the coming year, they used the same words to describe brands such as Apple and Google as they did effective political leaders: visionary, inspiring, helping to solve problems.

When discussing the role of the brands they identified as leaders, they further noted:

  • Many companies believe they have a responsibility to “give back” to society…in the future. . . . [Businesses will] have to give to get.
  • Business is more suited than government to fix things.

What really didn’t make sense at first was the brand participants named as the number one good corporate citizen. More than 2200 brands were mentioned, and the brand that rose to the top was Apple. Although I had expected people to name Apple as the number one leadership brand, I hadn’t anticipated they would also cite it as a good corporate citizen, especially since the media and corporate social responsibility experts were strongly criticizing Apple for its supply chain integrity at the time of our survey.

The reasons why participants chose Apple were even more surprising:

  • “brings joy into my life through giving me music 24/7”
  • “Apple has transformed how we communicate with people around the globe.”

One participant went as far as to note, Apple “giv[es] to society by listening to the consumer.”

Walmart in the US and Tesco in the UK were also cited in the top five good corporate citizens, although notably fewer cited each than did Apple. The majority spoke about the convenience and low pricing of these brands, telling us, “Their low prices afford me a better lifestyle.”

For many real people, the label “Good Corporate Citizenship” meant something different than it did to those of us in industry. Good Corporate Citizenship began with a ME proposition – with offering people fair value and improving their individual lives.

The other brands that were ranked as the top-five good corporate citizens were chosen for more predictable reasons. They were investing in sustainability and society, and bettering life for a larger number of stakeholders not only consumers of their brands. In other words, they were perceived as servicing the collective WE through their initiatives.

The research signaled that, despite the resources that companies were investing into corporate social responsibility and sustainability, good corporate citizenship resonated most when it was tied in some way to people’s day-to-day routines or addressed their individual hopes for themselves or for society and the environment. People’s unease with global issues, apprehensions about the economy and fears about the environment had led to a new, ME-inclusive form of good corporate citizenship.

Over the next three years I explored these findings further and deconstructed Brand Leadership from good Corporate Citizenship and favorite brands, which acted as a proxy for brand loyalty.

The results of my research among more than 6000 consumers consistently confirmed that people would like brands to both better their lives and better society. They would like companies to provide solutions to their personal ME problems, needs, and dreams and to their generalized WE worries about the economy, the problems in the world, and the planet.

The characteristics that described brand leadership, good corporate citizenship, and favorite brands overlapped, and together formed a five-step model of Brand Citizenship that spans across something I’ve labeled as the ME to WE continuum.

Importantly, rather than ending with trust, the five steps of the model of Brand Citizenship begin with it. Like the friends you trust the most, trusted brands live up to their promises to customers, employees and other stakeholders. They do what they say and don’t make false claims or promises. People are faithful to brands that are clear about why they exist and how they conduct business - and then support this with products and services that are reliable, a sincere voice in their communications; giving to give, not only get; and actively listen – in other words, using “big data” to benefit their customers, not only cross-sell products and services.

The second step of Brand Citizenship is Enrichment - or enhancing people’s daily lives. People identify more with—and are less price sensitive toward—brands that help them to simplify their routines, make mundane tasks less dull, and make life more inspiring. The brands people named as enriching their lives often have interesting backstories, focus on ethical supply chains and use natural ingredients. Brands such as Mrs. Meyers in the US, which is owned by SC Johnson, Burt’s Bees, Plum Organics, a healthy baby food manufacturer, and Ikea.

Responsibility, which is the third step, is the pivot point between being a ME and a WE brand. Responsibility begins with treating employees well and fairly. Participants in my research told us that they won’t give a company credit for the good it’s doing for the planet or through ethical supply chains if it isn’t treating its employees well and fairly. Behaving responsibly begins with treating those closest to home well first. As fashion brands know, this also includes workers at suppliers. Participants in my research recognized the brands that took action after Rana Plaza as good corporate citizens, with H&M being named the most often. And more than 20 years after Life magazine published picture of a child assembling a soccer ball, child labour practices still haunted Nike.

Following this emphasis on treating employees, suppliers and the environment respectfully, it seems logical that Step 4 is about fostering Community. The brands we choose are extensions of who we are and act as badges for what we are about to other people. People want brands to connect them to others who share their values. Importantly, community is about more than social media communities. Natura, one of the sponsors of this conference, is a brand that participants in my research named as seeing community holistically. More so than other brands, Natura understands the interdependence among people, between people and communities, and between people, communities and nature.

The final step of Brand Citizenship is Contribution. Or make me bigger than I am through my association with you. Contribution is all about making people feel as if they are having a bigger impact on the world through being your customer or employee. It’s about enriching WE. Lush, the handmade cosmetics company is a great example of a brand that makes people feel like they are contributing more. From its ingredients to its supply chain to its advocacy efforts, CharityPot and the Lush Summit, the brand continually expands its reach and the ways in which it connects its fans to sustainable products, fair trade, and philanthropic causes.

My research consistently demonstrated that brands that advocate for the things that matter most to customers and employees begin by demonstrating how they deliver value to individual people, or ME, and then how they move outward to deliver added value to society—or the collective WE. Beginning with a meaningful purpose, they integrate doing good activities, such as fair-employee policies, CSR, sustainability programs, ethical sourcing, and charitable giving with brand development in order to create a unified proposition that strengthens reputation, fosters greater loyalty, and enhances value creation. They know that doing good is not limited to people with sustainability, sourcing or social responsibility in their titles. It is an ethos that runs across the brand and operations.

Business is a social and cultural institution as much as it is a source of economic prosperity. Large multinationals, midsize companies, and start-up social enterprises alike have an opportunity to advance society, sustain the planet, and do good in the world, while simultaneously earning a profit for their shareholders. Like my journey uncovering the five steps of Brand Citizenship, the journey to become a company that embraces an ethos of doing good is not a linear one. Every company must approach it differently dependent upon its culture and value proposition. Perhaps most importantly, the journey is not one that has an ending. This is not a check the box type of exercise. Each time you or a competitor does good or people’s views change, the bar is raised and you must deliver more.

More and more people are demanding that companies break down the boundaries that divide what they return to shareholders from what they offer customers, employees, suppliers, other stakeholders, and even the environment. More and more people know this is the only way we will be able to sustain our lifestyles and our planet. And more and more it will be essential for those responsible for sustainability and ethical sourcing to communicate how these elements of the interdependent circle of Brand Citizenship benefit customers, employees, business operations, and investors as much as society and the planet.

Thank you. It’s an honor to share this journey with you.