An ancient Chinese curse proposes for a favorite enemy: "May you live in interesting times." The wish suggests that "interesting times" are periods of turbulence and change in which established businesses and individuals are brought under pressures which threaten to overthrow them. Such a malediction may now be operating against Lebanese business and its leaders, because they are surely experiencing interesting times, although few general managers would use this phrase to describe what they are going through.
We are in the opening phase of a social upheaval that will, if it runs its apparent course, radically change the character and performance of business organizations in our society. If this judgment is correct, the significant question facing general managers is not how to prevent change, but rather how to understand it, accommodate it, and bring constructive influences to bear upon it.
There is an implicit movement to change the unwritten social contract that has existed between private enterprises and Lebanese society. The social contract implicitly stipulates that business bear no responsibility for the general living conditions of the nation or in local communities.
The proposition that society is challenging business organizations and their managers with demands can be fairly described as revolutionary. There is a shift in the balance between economic progress and social progress, between the quantity of life and the quality of life. Consider some of the demands widely debated in recent months:
- refrain from or lessen price increases.
- invest in nonproductive equipment to minimize environmental contamination by eliminating, controlling, or cleaning discharges into the air and water.
- contribute generously to the support of charitable, educational, and artistic organizations and activities.
To debate this explosive issue and to explore ways in which profit organizations can respond to the "social responsibility" demands placed upon them by the society in which they operate, the General Manager Magazine invited leaders from profit and non-profit organizations to a roundtable discussion on how corporations and charitable organizations operating in Lebanon can work together to form strategic alliances and benefit from the shift in public attitude.
Enlist Suppliers and Customers
The consumers who are reached by affinity-by-purpose marketing are not always motivated by lower prices, convenience, or gimmicks. They are becoming increasingly resistant to advertising. But very often they can be reached through an intangible value such as social responsibility. So companies with a promotional budget are looking for something "different," something beyond ads in the newspaper or a booth at the local trade show.
Thus, more and more, non-profits and corporations are joining strategic alliances to form cause-related marketing. It is a marriage of convenience that makes money for both the nonprofit and the for-profit. In the simplest form of this strategy, the for-profit advertises that it will contribute a specific amount or a percentage of each sale of its products in a certain period to the nonprofit. The corporation gets to connect itself to a good cause and motivate consumers to spend money.
The American Express Company is an outstanding pioneer in developing this concept. They are most famous for raising $1.7 million for the Statue of Liberty restoration, the campaign that increased usage of American Express cards by 28 percent and increased the number of customers by 17 percent.
Mr. Erwin Guerrovich, Chairman of Intermarkets Group, commented "in Saudi Arabia and the Gulf region, corporations are becoming more aware of the public relations impact of charity and environmental issues' programs. A large pharmaceutical company that had a virtual monopoly in the market, responded to a public demand to lower prices by formulating an integrated program of social welfare and community service. The program was highly visible in the press and on television and helped improve the tarnished image of the company in the eyes of the public."
In Lebanon, a recent example is that of "Bo Jeans company that launched an ad campaign to educate the public on the use of condoms." Mr. Francois Mourad, Marketing Manager of Ksara, continued: "Is the company concerned with public health? I don't think so. It is because they have a target group - teenagers - who are concerned with the issue. The company hopes that the target group identify with this message and believe this company is concerned with the problem and understands their worries. So they want to work with this company. But is the Lebanese consumer fed up with traditional advertising and open to this approach?"
Mr. Berge Daw, Marketing Manager of Bank of Beirut and the Arab Countries, believes "using social issues as a promotional tool is still not very effective in Lebanon. The public is still not responsive to this type of advertising. Recently, we embarked on a marketing research project at the bank. We sent questionnaires to our customers, and at the bottom we stated that if you respond to this questionnaire the bank will give L.P. 5000 to your favorite charity. Many of our customers phoned us and said that they prefer we charge their accounts with the amount."
Mr. Guerrovich added "when companies undertake charitable or environmental programs, it is for purely mercantile reasons. Either because of a tax break or as a public relations tool. Companies in ones, such as money or products.
Companies should specifically reward employees who engage in charitable activities. In one program, workers who contribute 16 hours of personal time per year in community services can take the Christmas week off with pay.
- Leverage your company's expertise: Companies can use their company's skills to enhance nonprofit operations. Can you help get computers up to speed? Design a marketing strategy? Do an energy audit? Local companies can lend their best brain in a field.
-Attract other companies: One of the simplest and cheapest thing you can do to make a difference is to be the first to take a stand on an issue, then involve others. One company persuaded 35 other companies to join it in building an elementary school in a low-income area.
Assessing the Right Alliance
Most businesses want to support groups that benefit their employees, making it easier for them to make a profit or help build an image with customers or investors. So how can a company assessing the right charity to support? Ask the following questions:
- How will a charity's mission advance and logically connect to your corporate mission? Examples of "natural linkages" include preventative medicine and a health club chain; day care and a toy manufacturer; teen center and running shoes.
- Do your organization's interests and values match?
- How much money, products, services and/or time can your organization donate? What specific benefits can the charity provide? How will your support be acknowledged, promoted and publicized? Program ad space? Our name on their vans?
- Is the charity well-managed with clear objectives and guidelines? Who is on the board of directors? How visible is the charity in the community? To your organization's target group? Does it have universal appeal?
- Does the charity have a previous history of partnerships with corporations? Do we want to set up a partnership with a charity?
The Payoff
Business has been defined and perceived as soulless for so long that when people get a chance to express a bit of caring through their company, they love it. By doing good, company owners can reap many benefits:
- The ability to attract and retain employees longer. The rank-and-file employees will be proud to work for a company that supports their causes. - Feel a more intense bond from their customers. Customers believe that what they put out in the world will come back to them.
- The good publicity that often arises from such programs. A social purpose injects humanity into the process of commerce.
- "Goodness by association."
- Supporting charities with snob appeal enables the company to show off for its best customers.
- Conversely, supporting projects for social causes not only puts money where it is needed the most, it can also alleviate charges of elitism or lack of social conscience.
- Company people can work with politicians and bureaucrats as peers involved in the same causes.
- Love. It can be lonely at the top.
- Money. Spending money in a targeted way with charities can increase sales, profits and customers.
So why are corporations and charities involved together? The attitudes and misperceptions of both groups of each other tended to inhibit the formation of an alliance. When nonprofits are asked "what comes to mind when we say corporations," the response usually is "only care about profits, arrogant,and untouchable." The corporate world responds with "poor management, always have their hands out, can't make it in the for-profit world and is unrealistic."
Each group speaks a different language and have seemingly different values. But they need each other desperately and need to open the communication lines that will lead to alliances.
(The General Manager Magazine)
