Building Consumer Trust
New Models to Protect Your Freedom to Operate
Charlie [email protected]
www.foodintegrity.orgCharlie_Arnot
Earning and Maintaining the Social License (Sapp/CMA)
Freedom to Operate
Freedom to Operate
Earning and Maintaining the Social License (Sapp/CMA)
Social License
Definition: The privilege of operating with minimal formalized restrictions (legislation, regulation, or market requirements) based on maintaining public trust by doing what’s right.
Public Trust: A belief that activities are consistent with social expectations and the values of the community and other stakeholders.
Social License
Tipping Point
Flexible Responsive Lower Cost
Rigid Bureaucratic Higher Cost
Social License
• Ethics
• Values
• Expectations
• Self regulation
Social Control
• Regulation
• Legislation
• Litigation
• Compliance
Single triggering event Cumulative impact
The Social License To Operate
Activists Protest Mulesing
Mulesed Wool Bans
• 2004 – Abercrombie & Fitch boycotts Australian merino wool
• 2005 – American Eagle Outfitters ban announced• 2008 – Liz Claiborne (PETA is a shareholder)
announced Australian wool ban• 2008 – Adidas & Perry Ellis ban wool from mulesed
sheep• 2009 – John Lewis (UK department store) joins boycott
Social License
Freedom to Operate
Earning and Maintaining the Social License (Sapp/CMA)
Earning and Maintaining the Social License (Sapp/CMA)
Social License
Trust
Freedom to Operate
Trust
Earning and Maintaining the Social License (Sapp/CMA)
Confidence
Influential Others
Competence
Value Similarity Social License
Trust
Freedom to Operate
Trust research was published in December, 2009 – Journal of Rural Sociology
Shared values are 3-5X more important in building trust than demonstrating competence
What Drives Consumer Trust?
Shared
Values
Skills
What Does It Mean?
“They don’t care how much you know until they know how
much you care”
Polarizing Perceptions
Values and Ethics in Our Science Based Culture
Why we struggle building trust even though we care and are committed to doing the right thing
Three Levels – Six Stages1. Pre- Conventional
• Direct impact on me
2. Conventional• Societal expectations
3. Post-Conventional• Principle driven
Questions of Values and Ethics Kohlberg’s Moral Hierarchy
Lawrence Kohlberg, 1927 - 1987
Punishment-Obedience
The “law & order” orientation
Universal ethical principle orientation
The “good boy / nice girl” orientation
Personal rewards orientation
Social contract orientation
We have an ethical obligation to our employees, our animals, the environment, our customers and our communities
We comply with all environmental and employment laws and regulations
We take care of our land and animals because that’s when we get the best ROI
Questions of Values and Ethics Kohlberg’s Moral Hierarchy
Pre-Conventional Direct impact on me
Conventional Societal expectations
Post Conventional Principle driven
Pre-Conventional Direct impact on me
Conventional Societal expectations
Post Conventional Principle driven
Punishment-Obedience
The “law & order” orientation
Universal ethical principle orientation
The “good boy / nice girl” orientation
Personal rewards orientation
Social contract orientation
NGOs
Business
Questions of Values and Ethics Kohlberg’s Moral Hierarchy
Sustainable Systems
Ethically Grounded
Econ
omica
lly V
iable Scientifically Verified
Ethically Grounded• Compassion • Responsibility• Respect• Fairness• Truth
Value Similarity
Scientifically Verified• Data Driven• Repeatable• Measurable• Specific
Objectivity
Economically Viable• ROI• Demand• Cost Control• Productivity• Efficiency
Profitability
KnowledgeKnowledge
FeelingsBelief
Sustainable Balance
Brands as Agents of Social Change
NGOs have discovered that global brands can do what government cannot
Regulation vs. Market Pressure
“We attack the weakest link in the company’s value chain,” Kert Davies, Director of Research, Greenpeace
“We can dance with you or dance on you”
“Discovering brands was like discovering gunpowder.” -
Coles and Woolworth Control 80%
Market Action Works
"This announcement is another indication that Coles is acknowledging that consumers do not accept the cruelty that is routinely inflicted on animals in factory farms. Coles has recently shown important ethical leadership and we challenge other supermarkets to demonstrate that they too care about the welfare of animals."
There is no doubt that there is a growing concern for the welfare of farmed animals in Australia and over the past couple of years, Coles have made some considerable commitments regarding our sourcing policies. By 2014 Coles will no longer sell any fresh pork products that have been farmed using sow stalls and by 2013 we will no longer source caged eggs for our Coles brand range.
We have also changed our store egg layouts, with free range and RSPCA certified eggs now being displayed in a more prominent position than caged eggs. Additionally, to help make the transition from caged to free range eggs easier for our customers, we have significantly reduced the price of our Coles brand free range eggs.
Coles invests a lot of effort into ensuring we meet our customers' expectations and we will continue to review our policies and work with our suppliers in this regard.
Yours Sincerely
Melany SinclairColes Customer Care
Transparency No Longer Optional
Someone is watching everything you do all the time
• Today, roughly two billion people are connected to the internet • 2015 – 80 percent of the global population will have a personal
mobile device that can be both a receiver and transmitter • We send 2.9 million emails every second • Upload 20 hours of video to YouTube every minute• Send 50 million Tweets a day• Spend 700 billion minutes on Facebook every month • If Facebook were a country, its 845 million users would make it
the third largest on the planet behind China and India • Social media now accounts for nearly 25% of time spent online
Social Media Explosion
• Today, everyone with a cell phone is a cinematographer
• Employees, consumers, customers, bloggers, social media food communities, activists, NGOs and others can all directly influence the public conversation about your company at the speed of Twitter.
• The question is no longer, “will you be transparent?” but “how will you manage your reputation in an age of radical transparency?”
An Age of Radical Transparency
Today’s Integrated System
Today’s Integrated System
Today’s Integrated System
Today’s Integrated System
Times Have Changed
“It is not the strongest species that
survive, nor the most intelligent, but the ones
who are most responsive to change.”
- Charles Darwin
The Future of Food Issues Management
“There is a thin line between public, private and NGO management of the food system. Consolidation creates huge opportunity but also huge responsibility. We need to create managers where and how the public, private and NGO communities work together to manage the food system.”
- Ray Goldberg, founder of the Harvard Agri-Business Program, at IAMA, June, 2010
Integrated System Demands an Integrated Strategy
A Brand New Game
Integrated Trust Building Model
Building Consumer Trust
New Models to Protect Your Freedom to Operate
Charlie [email protected]
www.foodintegrity.orgCharlie_Arnot