Published 2013.11.12 CommPRO.biz

Let The Seller Beware!

Cohn & Wolfe, a division of international communications giant WPP, just released From Transparency to Full Disclosure, a study they commissioned to find marketplace hot buttons. They polled 3,000 consumers in Great Britain, China and the United States on what opens their wallet. Price and quality were the overall winners with honesty (AKA ethics) coming in third place, except in China where quality and honesty beat out price. 

The transparency part comes from consumers’ interest in the values adhered to by the companies they do business with. They want the goods they buy created and sold by folks striving to do as they would do, folks who put their customers, workers, vendors, their communities and the environment ahead of profits. They worry most about the food they buy, that it is what it’s claimed to be and that it is produced with the buyers’ safety and health foremost.

You know what they hate most? A cover-up. They understand that we all goof-up now and then, but they expect us to fess-up immediately and do right by those who may have been misled or injured as a result of the error. What’s more, they have a clear view of where the buck stops, it stops at the top. The Cohn & Wolfe study found that “84% of UK and US consumers and 90% of Chinese consumers believe that if you are the leader of a company you cannot claim ignorance about something bad happening in your business, showing that there are no excuses for today’s leader.” They summed it up succinctly: “CEO = Chief Ethics Officer.” A point missed by the leaders of too many corporate entities of late.

The results of this study read like “Basic Communications 101.” Isn’t this what we’ve been telling our leaders or our clients?” Isn’t this what has been shown as the most profitable business model? Isn’t this what attracts and builds the most talented team in communications or any business? Of course it is. It’s the kind of team we all want surrounding us. The kind of team we all want to be a part of. If you are a leader, if you are the Chief Executive Officer (AKA Chief Ethics Officer), what are you waiting for? If your CEO doesn’t understand how interchangeable that title needs to be, what are you waiting for?

It all comes down to “Why would you work for, or do business with a crook?” While that quote sounds like Will Rogers, it isn’t and it doesn’t matter who said it, it’s a simple truth; one that only a few shortsighted business leaders choose to ignore. Actually people expect more than someone who just walks a line between lawful and criminal. We expect the businesses we trust with our hard earned cash to do right by us, to do the right thing. When they misrepresent their offerings, or dance around the truth, they betray us. And usually we simply never do business with them again — never.

Wal-Mart, Same-Ol’, Same-Ol

They gathered by the thousands earlier this month (2013.06.06) at the Walton arena on the University of Arkansas campus in Fayetteville. It was the annual meeting of the world’s largest retailer, Wal-Mart. The crowd was largely made up of employees who had earned a trip to Fayetteville from their remote corner of the wonderful world of Wal-Mart through some display of loyalty. There were a few shareholders and high profile performers including Hugh Jackman, who was the meeting’s host. 

Unlike the Wal-Mart employees at the meeting, Jackman and the other celebs were not there at company expense, at least not Wal-Mart’s expense. Given the revenues generated for major motion picture and music companies by Wal-Mart –reportedly as much as 40% of their total income– we’ll guess that the stars were well compensated for their visit to Arkansas by someone.  

The affair was not all glitz, glitter, and company presentations. Time was set aside for participation by the shareholders, fifteen minutes out of the four hours, about 6%. That despite the fact that the shareholders had some serious beefs. Like what have you done about the rampant bribery, the deaths in Bangladesh factories and declining year to year store sales, things like that? Management’s answers? Less than satisfying. Easy for them knowing that the Walton family controls more than half the votes. As long as the family is happy, the management can ignore the rest of the world. 

A shareholder/employee commented on CEO Michael Duke’s nearly $21 million 2012 paycheck: “Times are tough for many Wal-Mart associates. We are stretching our paychecks to support our families.” Considering our low wages, she added, “I don’t think that’s right.” A considerable number of those in the audience cheered and applauded her comment. You can bet those folks won’t get a free ride to next year’s annual meeting, assuming they even keep their jobs.

For his part Duke said, "You operate with integrity, our company was founded on integrity. For Wal-Mart, compliance is an absolute. Make no mistake about it; we will do the right thing." It’s easy to see the disconnect right there. Duke obviously doesn’t understand that the “Right Thing” is not compliance. "The “Right Thing” is the ethical business model. “Compliance” is the letter of the law, working right at the edge of the law; Compliance is what you can get away with.

Compare this annual meeting with one held a month earlier in Omaha, Nebraska, the annual Berkshire Hathaway bash thrown by Warren Buffett. “Buffettpalooza,” as it’s called, attracted more than twice as many people, 35,000, all shareholders, all happily paying their own way. But those are just the surface differences when compared to the Wal-Mart annual meeting. The real difference lies in a culture of transparency at the core of Buffettpalooza, a culture that’s nowhere in sight at Wal-Mart.