Page Exchange: “Culture Eats Strategy for Breakfast”

June 29, 2016, Arthur W. Page Society

In San Francisco last week, about 50 Page and Page Up members gathered for our first ever Page Exchange. It was a new type of event that emphasized panels and workshops to maximize the ability of attendees to network, learn and share with one another.

Our theme examined the new realities of stakeholder engagement, in terms of how emerging enterprises are contending with external stakeholder issues and how the CCO is working as an integrative force across the C-Suite.

Here are five takeaways for those who could not join us.

1.The more things change, the more they stay the same.

Earned media still matter more than paid. Relationships still matter, perhaps more now than ever. The foundational role of the CCO, as a strategic advisor, minder of reputation and builder of stakeholder relationships, is increasingly crucial.

In terms of public affairs – which is progressively jumbled together with Marketing & Communications – upstart tech juggernauts like Airbnb, Access (an Alphabet company working to expand delivery of hi-speed internet) and Uber struggle with the same types of regulatory and stakeholder issues as their more established counterparts. What matters today, as always, is aptitude in engaging with stakeholders, identifying common ground, and mobilizing support as early and as loudly as possible.

2. "Culture eats strategy for breakfast."

That gem is Corey duBrowa of Starbucks paraphrasing a mantra of his boss, CEO Howard Schultz. For Starbucks, its culture puts the needs of its employees (or "partners") first in terms of priority, and then aligns the company's business strategy and goals around that. When Schultz was once confronted by a shareholder complaining about investing profits into LGBT efforts, he responded that anyone who saw the company's efforts to "embrace diversity of all kinds" should sell their shares in the company, as "not every decision is a purely economic decision." The adherence to the mission, purpose and culture of Starbucks are central to what makes it an iconic brand.

Example: Starbucks ties its P&L to its social impact efforts by identifying a social issue that is relevant to partners and taking action that satisfies both. In the case illustrated here, the company helped to catalyze a 40-member coalition that hired 100,000 at-risk youth in a challenging economy.

3. Corporate purpose drives the brand.

Leading enterprises create more than customer and shareholder value; they also deliver a broader societal benefit that aligns with their mission and demonstrates their corporate character. Building on the previous point, customers – especially younger ones with growing purchase power – decide what to buy and where to work and who to support based on their authenticity and social conscience. Corporate purpose isn't stapled on to a strategy or undertaken to issue a CSR report. It is a manifestation of the identity of the brand.

Example: LIXIL Group is a global leader in housing and building products, managing well-known consumer brands like American Standard and Grohe showers, faucets and ceramic ware. It also recognizes that we live in a world where 2.4 billion people still lack access to basic sanitation, which poses not only health risks due to disease but also safety risks to women and girls made vulnerable when relieving themselves out in the open. The company is investing in products aimed at tackling these issues, such as a working toilet that costs $1.50 per unit that minimizes disease and odor, with a million units in communities around the world. (At the other end of the spectrum is a $50,000 model made of gold that sings to you, in case you're interested.)

4. Engaged employees understand context.

Business doesn't operate in a vacuum, and employees don't live in one, either. If employees are our most effective ambassadors, we must empower them to advocate effectively – not by just telling them what to say, but helping them understand the broader environmental context. The greater their understanding of what's going on in and around the company, the better they will be at advocating.

Example: Access acknowledges that it can be difficult to activate employees to advocate for the company, especially in the technology sector. People aren't always as informed or diplomatic as they could be, at least on their own. It's incumbent upon the organization to deliver them understandable, relatable information about the issues at play, how they matter, where the company stands, and why.

5. The soft skills are the hard skills.

Being able to build and maintain productive relationships, to write persuasively (and, correspondingly, to think and express oneself effectively) – are essentially the skills that require mastery to engage stakeholders properly. We need to nurture and develop those skills in ourselves, and especially in the next generation, from which good writing is becoming increasingly scarce. #TellYourStory #MakeMeBelieve

Likewise, CCOs need to be effective leaders and collaborators with their C-Suite colleagues. So much of what we do demands that it be integrated fully across the enterprise – working with HR on corporate culture, with legal on public affairs issues, with marketing on brand, etc. Corporate character permeates the enterprise, and it does so on the basis of the CCO's and their team's ability to work successfully across functions.

Relatedly, CCOs need to be excellent practitioners of " nemawashi," a Japanese term describing the practice of laying groundwork for change by quietly informing, obtaining feedback, and winning support from interested parties before an action is taken. It's a rooted business custom in Japan, but an important stakeholder-first mindset that creates more positive outcomes in general.

If you attended the event and have additional insights to share with your fellow members, leave them below in the comments.

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