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Final Paper for Ryerson PR Program

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EXHIBITING CORPORATE VALUES BRINGS SUCCESS

HEATHER BODAJLA

Certificate in Public Relations

Submitted in partial fulfilment of the requirements of the course

CDPR 107

Public Relations Project

Continuing Education Division

Ryerson University

Toronto, Ontario

July 2018

 

Table of Contents

Abstract 3

EXHIBITING CORPORATE VALUES BRINGS SUCCESS. 4

Understanding Organizational Direction and Purpose 4

Stakeholders 7

Culture and Internal Communication. 9

Reputation. 12

Conclusion. 14

References 15

 

Abstract

This article discusses the relationship between companies that live corporate missions, visions and values and how it relates to company financial success.  Success is defined as being profitable.  I also think success is in the awareness a company is able to generate from living its values.  From my research, I discovered that companies that live its mission, vision and values are successful.  Several companies were studied, and will be referred to in this article, such as Patagonia, Clif Bar, Toms, Life Is Good and Kind.

Keywords:  values, corporate social responsibility, leadership, communication, purpose, trust, authenticity, reputation

EXHIBITING CORPORATE VALUES BRINGS SUCCESS

Companies that live the corporate mission, vision and values become successful not only on the balance sheet, but in doing something good for the world.  If the mission is the reason for being, then the purpose of the mission, is the reason beyond profit.  Many companies, such as Patagonia, Clif Bar and Toms, live and communicate strong corporate values to employees to ensure buy in for the mission.  But it doesn’t stop there.  Communicating the values to the consumers, community and shareholders in order to gain their buy in leads to profitability.  Successful values-based companies need to reach their employees in part, through strong internal communication.  As public relations practitioners, we use a combination of culture, leadership, trust and authenticity to do this.  Finally, a values-based company needs a solid reputation in order to be successful.

Understanding Organizational Direction and Purpose

For many organizations, there is more to just having a mission, vision and values up on the wall or on the company website.  Nowadays, companies are expected to walk the walk and talk the talk, so to speak.  To truly make an impact, communication needs to come from, and be demonstrated by the CEO and leadership.  There must be clarity around the mission, vision and values (Levin, 2017).  This will ensure employees understand organizational direction and purpose.  It will also ensure they understand the big picture and their role within it.  Reinforcement of values every day is another way to ensure alignment (Levin, 2017).  As communicators, we need to ensure employees understand company values and influence them to embrace them (Bendeler, 2018).  We can do this across many levels with town halls, all hands meetings, newsletters, the company website, posters and by telling stories (Bendeler, 2018).  Gary Erickson, the founder of Clif Bar, implemented weekly all company meetings to talk about the news and how it relates to the current business (Erickson & Lorentzen, 2004).  He tells stories about his adventures and how they relate to the path of the company, he will call a customer to thank them for their business and he always ends a meeting by reading a customer letter (Erickson & Lorentzen, 2004).  These accomplishments confirm the work Clif employees do has tied back to the company aspirations.  It also reinforces where employees fit into the big picture, so they understand how their jobs tie back to company goals.  When organizations talk about culture, they’re really talking about purpose and values (Fridman, 2017).  Rather than simply talking about them, good leaders live them.  Patagonia’s mission statement is to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” (www.patagonia.com).  Patagonia founder Yvon Chouinard created innovative rock- climbing tools unlike the others in the market at the time.  These tools were environmentally friendly to the rock walls and lasted much longer.  This example demonstrates Chouinard’s commitment to the environment and his mission.  Good leaders take care of their people.  A great example of a caring culture comes from Patagonia.  When Yvon Chouinard’s wife discovered new mothers were coming back to work too quickly after having their babies, she not only convinced her husband to offer a paid two- month maternity leave, she also established an onsite daycare (Chouinard, 2002).  Because it was subsidized for employees, they felt better when they came back to work knowing that their children were taken care of during the day.  Successful organizations recognize employees for behaviour that is in line with company values.  Toms take employees on giving trips where they assist non-profit partners and see corporate giving in action (Mycoskie, 2005).  Life Is Good has an Optimist of the Year employee recognition award.  The founders give it to an employee who embodies the superpowers of Life is Good (www.lifeisgood.com).  When I spoke with Jill Page from Ronald McDonald House in Hamilton, she also told me they recognize volunteers bi-annually and during Volunteer Week (H. Bodajla, personal communication, July 25, 2018).  It is important to distinguish and acknowledge the behaviour you want to promote within the company, because it inspires others and their behaviours.

Companies need to maintain an open communication structure (Brigham and Linssen, 2010).  Information has to flow up and down quickly.  This is important in crisis situations when immediate action is required.  It also empowers employees to know that they have an open line of communication straight to the top if they need it.  As communicators, we can ask employees what’s important to them and let them help identify the company values (Fiske, 2011).  We can also tell stories about employees bringing the mission and vision to life (Holtz, 2017).  People like hearing stories about other people.  These stories will influence others to adopt the same behaviours.  It is important to share the metrics on the impact of the purpose (Vesty, 2017).  For example, Toms measures what percentage of customers are more socially conscious because of the company (Vesty, 2017).  They also do an employee engagement survey to make sure the values are still important to everyone in the company (Vesty, 2017).  Lastly, internal and external messaging needs to be aligned and transparent (Levin, 2017).  The messages going from the company to the public should be the same messages employees are experiencing inside the company.  For instance, Facebook, Linked In and the company website should reflect the internal messages about the values (Levin, 2017).  At Kind, founder Daniel Lubetzky fosters transparency internally and externally with his leadership style.  He says his customers, team members and trade partners appreciate it (Lubetzky, 2015).

Stakeholders

Let’s explore the impact a values-based culture has on its employees, customers, community and shareholders. “When they are deeply authentic, and prominently displayed, good vision statements can even help orient customers, suppliers, and other stakeholders,” (Holtz, Coleman, 2017).  The purpose, or mission, often guides every decision an employee makes (Holtz, Coleman, 2017).  Or, at least, we hope it will.  In the examples I looked at, I found many cases of employees guided by company values.  Shel Holtz talks about Loqules, a company that offers its employees ways to have fun that are also giving back (Holtz, 2018).  Employees can go surfing with a professional or choose to share the experience along with a non-profit.  This way, they both share in the fun.  Companies with strong values will attract employees with similar values.  Sometimes, they will even take a lower salary (Holtz, 2018).  Patagonia considers potential employees who are outdoorsy and care about the environment even if they don’t have the strongest hard skills for the job.  Its argument is, those skills can be taught.  The passion can’t be.  Increasingly, we hear that millennials want to work for a company that makes a difference.  I don’t think this sentiment is any different from other generations’.  Patagonia was founded in 1973 by like-minded people who all had a love of the outdoors and wanted to do good things for the environment.  This isn’t any different than today’s millennial views.  Some interesting recent research from Weber Shadwick found that 51% of millennials will buy from a company with a CEO who is a strong activist and represents their views (Gazdik, 2017).  The results also said future generations will pay more attention to how companies communicate their values because it will influence where they choose to work and spend their money (Gazdik, 2017).  Millenials are the future workforce, so it is important for today’s companies to appeal to their needs and beliefs.  Customers also have the same feelings, including millennial customers.  They have strong beliefs and want to support values-based companies that share their principles (Holtz, 2018).  Simon Sinek does a great job explaining why consumers buy.  He says people buy the “why, not the what.”  Brands need to communicate why they created something, or why you need it.  People don’t care what it is.  If they believe your reason why, and it aligns with why they need it, they will come on board with you.  Sinek believes the goal is to do business with people who believe what you believe (Sinek, 2009).  For Toms, community is customers and future customers.  The company and the community care about the same values.  They engage customers with their message when they send out emails.  The emails aren’t used to simply sell more shoes, they include stories about Toms’ movement and giving back.  They also use social media to engage customers as influencers to spread the good word.  Toms’ communication encourages member to member and peer to peer conversations.  Toms’ customers share the same beliefs, so they buy Toms’ products and support the movement.  Companies such as Patagonia, have come out to take a stand on social and political issues (Holtz, 2018).  When President Trump announced he would reduce the size of Bears Ears National Park by 85 per cent, Patagonia took a stand and changed their website landing page to all black with a message that said, “The President stole your land.”  Not only that, but the company is taking the government to court over it.  Yvon Chouinard and Patagonia have declared their values and will go to great lengths to protect the sacred land.  On a smaller scale, Life Is Good engages its community by asking it to co-write the story.  Essentially, the community is an influencer.  The community is encouraged to share stories of optimism on the website and on social media.  Last but not least, shareholders are impacted by companies that live its values because their stocks go up and the company becomes more valuable.  One study showed that meaningful brands perform 200 per cent better than stock average indexes (Holtz, 2018).  Some investors only want to invest in values-based companies.  It is called values-based investing or social impact investing (Holtz, 2018).   For consumers, if the future of business is to align themselves with purpose-driven companies, and for employees to do the same, then shareholders must get on board too.  Social consciousness will affect everyone’s decisions.

Culture and Internal Communication

Successful values-based companies reach their employees through strong internal communication employing a combination of leadership, culture, trust and authenticity.  Having a common direction creates alignment in the company and avoids chaos.  When everyone knows the values, they are all on the same page and headed in the same direction to achieve the goals.  In my research, I noticed that many of these values-based companies really care about everyone, and everything around them.  The companies are focused on creating a great work environment, so people are happy about being there, and inspired to do great work.  At Patagonia, the culture sees work as play (www.patagonia.com).  Flexible working hours allow for a run at lunch, or surfing at 2:00 p.m. when the waves are crashing (Chouinard, 2006).  There are also many opportunities for volunteering on company time.  Patagonia, Toms, Clif and Life is Good all have robust employee volunteer programs where everyone is encouraged to participate.  The “Clif Corps” managed to accumulate 100,000 hours of community service over the course of a few years (www.clifbar.com).  Now it sets yearly goals and tracks to them.  Clif’s goal is to give back locally and globally, so it encourages employees to volunteer during company work hours.  The camaraderie during office hours has extended to outside the office.  At Patagonia, employees gather on evenings and weekends to hang out, work out and travel together.  This brings everyone closer together to stay in alignment towards achieving company goals.  All of the leaders I studied had an entrepreneurial spirit in common.  They started their companies as scrappy, young businesses-people and still had that mindset even as the company started to grow.  I would say being entrepreneurial is an unofficial value.  It translates to empowering employees to make decisions for the good of the company and its stakeholders.  Clif Bar has an employee-ownership program of the company, similar to stock options, and employees are encouraged to make decisions that best serve the company (www.clifbar.com).  At Toms, founder Blake Mycoskie says ideas don’t need to come from the top anymore (Mycoskie, 2011).  They can come from anywhere.  Daniel Lubetzky, founder of Kind, tells his team that every moment means something (Lubetzky, 2015).  This entrepreneurial culture demonstrates that every sale, product and customer mean something, no matter how big or small (Lubetzky, 2015).  Another characteristic these companies have in common is the leaders are future-focused.  Whether it’s expanding the headquarters to accommodate a growing workforce, expanding the business in new directions or simply product planning, values-based leaders look to the future.  Toms is known for its “one for one” model.  Basically, when you buy a pair of Toms, a pair is given to someone in need.  The model has expanded to glasses, bags and coffee.  The product offering is growing the business, and the charitable giving is growing along with it.  Patagonia spun off their business to create a new arm of e-commerce, dubbed “re-commerce,” for customers who want to trade in their old apparel for a discount on new apparel, or they can shop the used product.  This is a great example of future thinking, as well as living values.  With an eye on customer needs, Patagonia created a vehicle for consumers who wanted to buy the product, but found the price point too high.  This way, they can still have some Patagonia that fits with their budget and do something good for the planet.  Last but not least, leaders who are approachable and visible are important to internal communication and culture.  At Clif Bar, Gary Erickson believes in David Packer’s philosophy of management by walking around (Erickson & Lorentzen, 2004).  He and his leadership team walk around the office to be visible and talk to people all day.  He also puts himself and leadership in front of the company during weekly all-company meetings.  It keeps lines of communication open and encourages transparency and trust.  At Clif, there was a time when Erickson discovered employees were doubting how the product was made (Erickson & Lorentzen, 2004).  There was no trust in the food they were selling.  He needed to be more transparent with regard to the baking process, so he invited people to be part of it.  He arranged tours of the factory and process for employees, customers and brokers (Erickson & Lorentzen, 2004).  It helped build trust again across all levels of the company and within processes.  Daniel Lubetzky of Kind learned about trust in a big sales meeting one day.  He was invited by the team to come in for a big pitch, thinking that he would be leading the session.  However, once they started, he realized they had it all under control.  The team pulled it off and did an amazing job because Lubetzky trusted them to lead.  As leaders and employees, no one wants to make a mistake, but if you do, you must admit to it and own up to it.  It will secure trust from your employees.  That’s what Black Mycoskie did at one of his first trade shows.  Toms was appearing at an Airstream trade show and Blake developed an Airstream shoe that he thought the customers would love.  So, he made 800 pairs and brought them to the show.  He only sold five pairs.  He assumed the Airstream customers would love the shoe as much as he did, but if he had done his homework, he would have known that the Airstream customers were older and used to wearing orthopedic shoes, not the minimalist Toms style.  He admitted his mistake to his team, learned a lesson and they moved on from it.  This is also a great example of authenticity.  Blake showed his authentic self in this situation.  He was humble and admitted his mistake.  He only wanted what was best for his customer.  For leaders like Blake, Gary, Daniel and Yvon, every day is spent working on fulfilling the mission.  The companies were started to do good, so it makes sense that a values-based company would spend its days like this.  Patagonia strives to help the environment and save protected lands, Toms wants to get shoes on feet that don’t have any and Clif wants to feed people.  The founders’ passions led them to create values-based companies and they continue to run them this way.  Just because these companies make money and profit, doesn’t mean they aren’t authentic.  As Blake Mycoskie says, don’t hide your intentions (Mycoskie, 2011).  Patagonia makes millions, but they also give away 1% of all sales to support grass roots activists around the world (www.patagonia.com).  They have even become a Benefit Corporation.  A Benefit Corporation is legally required to have a corporate purpose to create a positive impact on society and the environment, and it has to care about its workers, community and environment above shareholders (www.patagonia.com).  It also has to publicly report annually on its social and environmental performance (www.patagonia.com).  This transparency of culture and values is now a legal requirement of Patagonia.  How exciting for the future of values-led businesses.  It is very clear to every stakeholder, what Patagonia stands for and supports.

Reputation

A values-based company with a solid reputation will be successful in the eyes of its stakeholders.  To build a good reputation, companies should look to examples set by Patagonia, Toms, Clif Bar, Life is Good and Kind.  These companies have increased profits and made a difference in the world.  Companies should think about reputation all the time (Olenski, 2016).  If something bad happens, it will be ready for it and not have to react (Olenski, 2016).  It is important to build up goodwill for your reputation and manage it like a bank (Young, 2018).  Heath Applebaum calls it a “reservoir of trust” (Applebaum, 2017) that we need to build relationships with stakeholders and communicate authentically with them (Young, 2018).  We can be more resilient when trouble happens (Applebaum, 2017).  It is important to be proactive and have a strategy in place.  It is also important to listen to stakeholders.  As communicators, we need to know what people are saying about our organizations online.  If we are following their comments and conversations, we can nip a problem in the bud with our strategy before the problem gets too big.  It is also important to build a network of supporters.  Encourage happy customers and employees to talk about great experiences online.  Successful reputations are about telling stories involving happy customers (Applebaum, 2017).  I saw this on many occasions on websites for Clif, Life is Good and Toms.  Life is Good encourage customers to tell their stories of optimism.  It encourages community engagement and peer-to-peer communication.  It has essentially created influencers who will spread the good word of Life is Good.  Clif Bar has an area of its website dedicated to its volunteer work and the impact on the community and employees.  Employees share their great experiences, inspiring Clif’s customers to do the same.  Every volunteer hour is putting credibility in Clif’s trust bank.  The company volunteering also builds trust through actions.  When consumers see Clif’s employees giving back to the community, they know how much they care about the company values.  This in turn, impacts consumer purchase decisions.  Consumers also make choices based on what they think of a company and their trust in it.  An effective way a company can build trust among stakeholders is to put leaders in the spotlight (Young, 2018).  Urge them to interact on social media.  It doesn’t need to be polished and perfect, but it needs to be authentic (Young, 2018).  Employees can also be empowered to communicate online (Schreiber, 2011).  Give some of them training to understand how to answer and interact on behalf of the company.  As communicators, we can give these employee spokespeople the messages and training, so they can advocate on behalf of the company.  Communication plays a role in shaping public perspective (Fombrun & Low, 2011).  The good a company is doing will make it that much easier.  An organization like Patagonia donates to charity and volunteers its time but also uses public relations to disseminate its messages.  When it has something meaningful to say, it contacts the press to talk about it (Chouinard, 2006).  Companies like Patagonia, Toms, Kind, Clif and Life is Good have great reputations that influence stakeholder support and ultimately lead to profits.

Conclusion

In conclusion, my research has found companies that live its values and communicate them to stakeholders, are successful.  When values are demonstrated by the CEO and leadership team, employees understand organizational direction and purpose.  I found that they hold the same values because they chose to work there.  Stakeholders such as customers, the community and shareholders also understand the purpose.  Today, many employees, customers and shareholders want to work for, buy from and invest in values-based companies because their beliefs align with the company’s beliefs.  They may seek out companies like this or hear about them from their network, but it is clear that more companies are becoming transparent about their values in response to the demand.  Internal communication is vital to building a culture of trust and alignment amongst employees who will then act as influencers to spread the message outside the company.  Finally, a values-based company’s reputation will attract great employees, customers and shareholders whose own values align with the company values.  Clif Bar says it may seek profit, but it is not the sole reason it exists (Erickson & Lorentzen, 2004) and that is the conclusion that I have also come to for all of the companies I have researched.  The people, and the greater good, come before profits.

References

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Bendeler, G. (2018, April 17). 5 reasons why purpose matters to employees. Retrieved July 24, 2018, from http://cw.iabc.com/2018/04/17/5-reasons-why-purpose-matters-to-employees/

Brigham, A. F., & Linssen, S. (2010, February 1). Your Brand Reputational Value Is Irreplaceable. Protect It! Retrieved July 20, 2018, from https://www.forbes.com/2010/02/01/brand-reputation-value-leadership-managing-ethisphere.html#6cf0abc73790

Chouinard, Y. (2006). Let My People Go Surfing: The Education of a Reluctant Businessman. New York, NY: Penguin Books.

Ellett, J. (2014, August 19). How Toms Creates Customers For Life. Retrieved July 24, 2018, from https://www.forbes.com/sites/johnellett/2014/08/19/how-toms-creates-customers-for-life/#702a084e28de

Erickson, G., & Lorentzen, L. (2004). Raising the Bar: Integrity and Passion in Life and Business. The Story of Clif Bar and Co.San Francisco, CA: Jossey-Bass.

Fiske, R. M. (2011, July 26). The Business of Communicating Values. Retrieved July 20, 2018, from https://hbr.org/2011/07/the-business-of-communicating

Fombrun, C. J., & Low, J. (2011, December). The Real Value of Reputation. Retrieved July 25, 2018, from https://www.iabc.com/wp-content/uploads/2014/10/The-Real-Value-of-Reputation.pdf

Fridman, A. (2017, September 14). How to Effectively Communicate Your Culture to an External Audience. Retrieved July 20, 2018, from https://blogs.oracle.com/smb/how-to-effectively-communicate-your-culture-to-an-external-audience

Gazdik, T. (2017, July 25). Millenials Favor Companies With Activist CEOs. Retrieved July 23, 2018, from https://www.mediapost.com/publications/article/304822/millennials-favor-companies-with-activist-ceos.html

Holtz, S. (2017, August 18). A new model for employee communication, Part 9: Vision/Mission. Retrieved July 23, 2018, from http://holtz.com/blog/internal/a-new-model-for-employee-communication-part-9-vision-mission/4798/

Holtz, S. (2018, March 6). The new era of organizational values. Retrieved July 20, 2018, from http://cw.iabc.com/2018/03/06/a-new-model-for-employee-communication-values/

Levin, M. (2017, May 31). 9 Ways to Reinforce and Live Your Company’s Core Values Every Day. Retrieved July 19, 2018, from https://www.inc.com/marissa-levin/9-ways-to-reinforce-and-live-your-companys-core-values-every-day.html

Lubetzky, D. (2015). Do the Kind Thing. New York, NY: Ballantine Books.

Mycoskie, B. (2011). Start Something That Matters. New York, NY: Spiegel & Grau.

Olenski, S. (2016, August 1). Why Brands Should Think Reputation Marketing, Not Reputation Management, To Win The Future. Retrieved July 25, 2018, from https://www.forbes.com/sites/steveolenski/2016/08/01/why-brands-should-think-reputation-marketing-not-reputation-management-to-win-the-future/#4dbc85a153fb

Schrieber, E. S. (2011, January 14). Reputation. Retrieved July 25, 2018, from https://instituteforpr.org/reputation/

Sinek, S. (2009, September). How Great Leaders Inspire Action. Retrieved July 23, 2018, from https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action

Vesty, L. (2017, January 18). How Starbucks, Honest Co., and TOMS Have Made Purpose a Vital Part of Their Culture (and You Can Too). Retrieved July 23, 2018, from https://business.linkedin.com/talent-solutions/blog/company-culture/2017/how-starbucks-honest-co-and-toms-have-made-purpose-a-vital-part-of-their-culture-and-you-can-too

Young, T. (2018, February 6). How to Build Trust as a Competitive Advantage. Retrieved July 25, 2018, from http://cw.iabc.com/2018/02/06/how-to-build-trust-as-a-competitive-advantage/

 

 

 

 

 

 

 

 

 

 

 

 

 

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