Business in the Community: Corporate PR or Civic Leadership?
Business Voice, August 2003
Several years ago a good friend of mine asked me to have a look at his business. He wanted to implement some cost savings. He was the MD and the company had been his family’s hands for three generations. At the time, it employed 450 people. The brief he gave me was interesting: ‘Don’t tell me to cut staff, I know I need to do that but some of these people are from the families that worked for my grandfather more than forty years ago. Without them, the business would not be where it is today. Anyway, you can’t turn people on the streets in a small town like this. They all have families to support’.
This same MD was also chair of the local magistrates, an active member of Rotary and a committee member of numerous local charities and other voluntary bodies. His company had the reputation for generously donating to fund raising campaigns.
In all these civic matters, this particular MD refused point blank be photographed in the local newspapers or to receive other kinds of publicity. All of his company’s donations were given anonymously. And yet despite this rigid shying of publicity, everyone knew that it was a generous, giving business. The consequence was that it was regarded as a pillar of the community and a company that was good to do business with and to work for.
What a sharp contrast to the attitudes of many large companies today. More likely than not, engagement in the local community is ‘managed’ by PR department or an ‘outsourced’ specialist agency. Decisions as to which charities to support will be taken with regard to the volume of publicity that will be generated and the extent that it will generated a positive social responsibility image. The success of its community engagement will be measured by the number of column inches generated in the local, national and business press.
No wonder citizens are becoming more suspicious of the motives of Big Business. As recent surveys have shown, they do not trust it to behave in responsible ways to the broader community. It is seen to be focused exclusively upon meeting the short-term financial expectations of its shareholders. Fortunately, not all large companies can be tarred with the same brush. On the contrary, many of the largest and best known companies in the country have outstanding track records in their support for charities, community engagement and their overall contribution to the god of society.
I was always fearful in the hey days of M&A activity in the global telecommunications industry, that BT would get taken over. This is a company second to none in its support for the nation’s science base. It supports several major leading edge international renowned scientific journals, sponsors major research programmes in British universities and at the local level, is never far away from supporting different environmental initiatives. My guess that all of this would have gone if the Mid West mavericks and the corporate asset strippers and buccaneers of the likes of Worldcom had got their hands on the company.
But for genuine civic engagement, many companies could do more in developing low profile, sustainable strategies that enhance the quality of life for their local citizens. They could well follow the example of my friend described above and of other very modest local entrepreneurs. It is in the small business sector that civic engagement is regarded as an essential plank of business leadership.
Historically, this has always been the case in Britain, It was the regional and local entrepreneurs who, in the 19th century, were the force behind the setting up of the great civic universities in the provincial cities. They naturally assumed they were responsible for developing and maintaining the cultural, educational, artistic and charitable organisations of the towns and cities in which they lived. This was even more the case for farmers in the villages of the countryside. They were often the local politicians and they regarded it was the duty of their businesses to improve the quality of life for their employees, families and other members of the local community. Even today, the viability of many unfashionable football clubs is dependent upon the financial goodwill of local business owners than it is on the contributions of large corporations.
Why are senior managers of large corporations less likely to be so engaged? More often than not is not the result of a lack of good intention. Rather it is because of the pressures of their jobs. They are under huge pressures to deliver results to the city institutions. These same shareholders expect their CEO’s to have undivided commitment to their businesses. Entrepreneurs and the owners of family firms may also be grossly over-worked but they can often operate under less scrutiny than their larger corporate colleagues.
Further, these same executives are more likely to be on the move and to have fewer personal community attachments. They are not long-term civic stakeholders in the same way as local business owners, who by virtue of their residence and the more permanent nature of their businesses in specific geographical areas, have a vested interest in enhancing civic pride. They can hardly uproot their businesses and move to China as have many of the multi-nationals who moved into Scotland ten years ago have now done.
Years ago, bank managers were expected to be the pillars of their local communities. This had important marketing and risk management purposes. By becoming enmeshed with local business leaders, they were able to offer detailed and informed personal advice to their customers, At the same time, it allowed them to keep their ears to the ground and be alerted if any of their clients’ businesses were getting into difficulties. This was customer relationship management at its best. Today, it is almost impossible to get through to the call centre, let alone to speak to the bank manager.
But perhaps the wheel is now beginning to turn full circle. Big business is facing a crisis of trust. It can only restore its credibility among a highly cynical citizenship if it once again, starts to pay attention to its local roots. That is, to the communities from which it recruits its staff, and upon the local infrastructures upon which they are dependent in order to compete. As their 19th century entrepreneurial fore-bearers and their present day SME colleagues appreciate, civic commitment generates corporate pride and with this, staff motivation and high performance. Certainly, that is what my MD friend told me all those years ago and his opinion is as valid today as it was then.
© Professor Richard Scase