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Four New Rules to Corporate Responsibility
By Tony Heredia, Vice President, Compliance for Target Canada
The origins of Target’s corporate responsibility philosophy began many years ago out of a modest-sized department store called Dayton’s Dry Goods. At that time, our founder, George Draper Dayton, proclaimed that our business must maintain “the higher ground of stewardship.” It was at that moment when Target’s reputation for dependable merchandise, fair business practices, and a generous spirit of giving was born. Ever since then, we’ve taken that philosophy and expanded on it—we not only believe we must maintain “the higher ground of stewardship,” but we also believe we are Here for Good.
For Target, being Here for Good goes beyond giving our guests the highest quality products for a fair price. It means we believe in providing the tools and resources for our team to lead healthy lives and enjoy fulfilling careers, demanding safe working conditions and ethical practices from our vendors around the world and paying attention to the impact our business has on the environment by making sustainability commitments we can keep. Ultimately, it means continuing our investments in communities. Ever since 1946, we’ve given 5 percent of our pretax profits back to the community. Today, our 5 perecent giving program invests more than $3 million a week in hundreds of communities throughout America.
We are extremely proud of our hard-earned reputation of dependability, fairness, and generosity—and every one of Target’s 355,000 team members work hard to make sure we never take it for granted. As part of my participation at the 2011 International Corporate Citizenship Conference, I presented some rules that every organization can use to be mindful of their reputation—rules that may be unconventional to some.
A New Reality
I proposed these rules because, as leaders and practitioners of corporate responsibility and citizenship, we face a new reality. We now live in the age where a single, misplaced Tweet has the potential to set off an incredibly destructive chain of events—a chain of events that can vanquish any organization’s hard-earned name and reputation.
If you remain unconvinced, just imagine the following scenario:
From the moment you began reading this article, every email that your organization has on a server somewhere—email messages from your CEO, senior management, personal and confidential messages—are showing up in chat rooms, message boards, and websites all over the Internet and piquing the interest of every news organization in the world.
Seems pretty far-fetched doesn’t it?
It’s not. It recently happened to HBGary Federal, an information security firm working with the FBI to investigate the pro-Wiki Leaks group “Anonymous.” Incidents like these are becoming the new norm and organizations can no longer control their corporate reputation or image the way they’ve done so in the past.
Whether its entities like WikiLeaks or Anonymous or hidden-camera tactics like those used against ACORN and National Public Radio, external forces are now playing a role in defining what organizations represent to the world like never before. Because of these forces, we now live in a world that forces radical transparency.
Adapting with Defense
Maneuvering in this new world still requires everyone to be part of defining their reputation in the traditional ways. It’s all about pitching in and making a good name for your organization. It’s what makes for a good offensive posture in this new world. But when good deeds and responsible stewardship aren’t enough, adding a defensive element to your citizenship strategy may just do the trick and help organizations to adapt.
This may seem counterintuitive, but I firmly believe incorporating a defensive element into corporate citizenship can help identify vulnerabilities, avoid surprises, and prepare organizations for the day they become the subject of scrutiny.
So where do you begin? How can your organization create this defensive strategy? One way to start is by applying four rules to your corporate citizenship framework.
RULE #1 – Assume Nothing Is Confidential
How many people that you work with believe confidentiality is achieved by merely looking around them to see who is nearby? Or mistakenly believe that placing a “do not forward restriction” on an e-mail assures secrecy? Today, confidentiality cannot be taken for granted because, with every technology advance promising security and confidentiality, there have been equal advances in covert surveillance and electronic intrusion. Therefore, it pays to be cautious. In fact, assume nothing is confidential.
RULE #2 – Find Your Halos
Halo effects are tricky things and are unavoidable. When a person establishes a long history of positive contributions to friends and neighbors, he or she creates a reputation of goodwill—one that may or may not be true upon inspection. The same is true for organizations.
For example, an organization can create a halo effect based on its giving practices. If an organization donates heavily to Kids’ causes, then subsequently in the mind of the public, your business is Kid friendly and not participating in practices that may harm children—hopefully this is the case, but these actions can be interpreted broadly and one misstep or misinterpreted business practice can create challenges.
Thus, in order to avoid facing this realization in the public square, determine what halos your organization has already. Make a list, evaluate their risk, decide how to handle them, and do it soon. Remember rule #1—assume nothing is confidential—including your halos.
RULE #3 – Discover Your External Stressors
External stressors are the opposite of halos. They are the unintended, negatively perceived impacts that result from doing business. For example, most retail businesses rely on providing open and public access to property, parking lots, and buildings in order to attract consumers who will hopefully spend money in their stores. But doing this also creates external stressors. With public access to property, poorly lighted parking lots, expensive merchandise, and a high volume of pedestrian traffic comes enticement—for shoplifting, car accidents and car thefts. These, in turn, cause external stressors on law enforcement to respond, patrol and react to the crime occurring on the property of a retail store.
At Target, we are aware of the external stressors we create for law enforcement and the resource we can be for public safety. To address this, we help create extensive public safety partnerships to strengthen neighborhoods across the country, including:
- Partnering with law enforcement ahead of problems and building relationships.
- Sponsoring safety awareness and education activities in our communities.
- Using our own resources to assist law enforcement, wherever possible.
- And using our expertise to provide a resource to public safety officials, both law enforcement and emergency management.
To find the external stressors in your organization, you’ll need to dig into your business model and identify the burdens you may place on others that aren’t part of your extended business operations—places where what you do may send the wrong signal and leave your hard-earned reputation vulnerable. When you find them, figure out how to minimize or eliminate them or identify ways you can make up for them.
RULE #4 – Know Your Reputation
Right or wrong, a good or bad reputation will play a role in any organization’s ability to do business. In short, your reputation matters. And, ultimately, this is probably the hardest rule for organizations to follow. When an organization’s image is threatened, executives often become distracted with arguing about who is right and wrong versus trying to figure out how the organization’s reputation may influence the outcome.
We saw this at Target, but we learned from it.
The influence of our reputation came to light after our highly publicized proxy contest in 2009. It was then we discovered how our superior reputation with our long-term investors secured votes in our favor.
And rather than rest on the laurels that performance had afforded us, we immediately sought to understand the specific drivers of our reputation across stakeholders and then developed specific reputation-based strategies, and we continue this practice to this day.
Learning your organization’s true reputation is difficult. It often requires confronting uncomfortable issues and asking tough questions. But if you do, it’ll be worth it because you’ll know what influence it’ll have in nearly every issue you face.
Starting Now
The good news is you can use these rules starting now—it’s never too late. Starting now will help guide your organization in the radically transparent era we now live in and, hopefully, help identify vulnerabilities, avoid surprises, and prepare your organization for the day it becomes the subject of scrutiny. But these rules are only the beginning. Every organization needs to find their “higher ground of stewardship,” and, more importantly, ask themselves if they are planning to be Here for Good.
