As the Occupy Wall Street protests spread nationally and internationally this week, executives at many corporations are probably breathing a sigh of relief that they don’t work on Wall Street – the obvious target of protesters. Well, perhaps they shouldn’t dismiss the protests so quickly.
Those fast-growing refugee camps of protestors that have spread like wildfire across the nation are an important reminder to all corporations, that in a crisis situation, good governance practices dictate there must be a plan to communicate with stakeholders as well as shareholders. Yes, the US is still in economic crisis and, like it or not, many of those stinky, loud, obnoxious and unorganized young people who make up the large majority of these protestors are corporate stakeholders – current, former or future customers for many of corporate America’s products and services.
These stakeholders are community residents affected by many of the business decisions corporations make. What message is your company prepared to communicate to protesters if they set their sights on you?
While the movement is very unorganized, many of the themes the protestors rant about have a common thread. Protestor are asking corporations to engage in a form of community governance – ‘people over profits’, as many protest signs read. Protestors are asking corporations to use their corporate resources to engage in business practices that create a positive impact on the community. Corporations have done this in the past without sacrificing profits, and they can do it now.
How? First, it might be good for corporate leaders to remember that US citizens are still in a crisis situation – trying to recover from the worst financial disaster since the Great Depression. Just as bank balance sheets had to be recapitalized after the financial crisis hit, consumers are now engaging in a similar process, but without the benefit of a bailout.
So it might be wise to consider how business decisions affect cash-strapped consumers. Fee income-driven business strategies – such as Citigroup charging $20 a month to maintain a checking account and Bank of America charging $5 a month for debit card use – have enraged the Occupy movement, leading some consumers to leave those banks. Netflix’s attempt to make users pay for two accounts in order to receive the same services also backfired as customers cancelled their service, which tanked the company’s stock and forced it to abandon the proposal.
By contrast, value-driven business strategies, such as Target offering a discount line of clothing, housewares and accessories from fashion designer Missoni, led to sold-out shelves and heightened customer interest. Target will likely be remembered for providing value during the economic crisis; the banks will be remembered for raising fees just when consumers could least afford it. Some of these actions will have an affect on company branding well into the future.
Implementing business strategies that help the broader consumer community get through the economic crisis in better shape will provide long-term benefits for everyone and provide an opportunity for some companies to develop brand loyalty that could last a lifetime.
[Article by Matthew Scott, Corporate Secretary]