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					THE AUTHENTIC ENTERPRISE
Putting $$$ on Green



Roger Bolton
APCO Worldwide

Zicklin Center for Corporate Integrity
Corporate Communications International
Baruch College
November 7, 2008
 1
 ARTHUR W. PAGE



“All business in a democratic society begins with
public permission and exists by public approval.”




 2
    THE WORLD IS CHANGING

     Arthur W. Page Society White Paper:
         “The Authentic Enterprise”




3
THE WORLD IS CHANGING

Rapidly changing context for global business

 At stake:

  Ability to manage relationships

  Competition over identity




 4
 DRIVERS OF CHANGE

Arthur W. Page Society White Paper:
    “The Authentic Enterprise”
DRIVERS OF CHANGE


          Globalization




                            Digital
                           Network
                          Revolution
         Stakeholder
        Empowerment




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GLOBALIZATION
    International   Multinational   Globally Integrated
     Corporation    Corporation         Enterprise




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GLOBALIZATION
The “Flat World” is reshaping the corporation.


 Shifting from hierarchical, monolithic,
 multinational …
 … to horizontal, networked and globally
 integrated.
 Operations are componentized, virtualized
 and distributed over an ecosystem of
 business relationships.

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THE DIGITAL NETWORK REVOLUTION
    Web 2.0




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THE DIGITAL NETWORK REVOLUTION


 108 million blogs, increasing by 175,000 daily
 Nearly one billion camera phones worldwide
 Second Life – 14 million people, 80 countries
 YouTube – 100 million videos/day




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STAKEHOLDER EMPOWERMENT


 Common interests

 Expertise

 Access to information




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STAKEHOLDER EMPOWERMENT


     A new “planetary conversation is building
     dynamic new communities. It’s a global
     dialogue powered by new technologies.”
      -- Ray Kotcher, CEO of Ketchum




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STAKEHOLDER EMPOWERMENT

             INVESTORS    CONSUMERS



                                       LOCAL
     EMPLOYEES                       COMMUNITY

                   COMPANY
      ACADEMIC                          NGOs
     COMMUNITY


             GOVERNMENT      MEDIA




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STAKEHOLDER EMPOWERMENT

             INVESTORS    CONSUMERS



                                       LOCAL
     EMPLOYEES                       COMMUNITY

                   COMPANY
      ACADEMIC                          NGOs
     COMMUNITY


             GOVERNMENT      MEDIA




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DRIVERS OF CHANGE

     Implications for enterprises:

     Threats …
      Influential new stakeholders
      Demands for transparency
      Less control over messaging, segmentation
      Risks to brand and reputation
      Regulatory activism
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DRIVERS OF CHANGE

     Implications for enterprises:

     And opportunities …
      To reach stakeholders
      To advance policy interests
      To build brand
      To enhance reputation


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     THE AUTHENTIC ENTERPRISE

       Arthur W. Page Society White Paper




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THE AUTHENTIC ENTERPRISE
     In this dynamic and radically open
     environment, a company must answer:

      What business are we in?
      What markets do we serve?
      What differentiates us?
      What do we value?
      What will endure?



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THE AUTHENTIC ENTERPRISE

The enterprise must be grounded in a sure
 sense of what defines and differentiates it
 (mission, values, principles, beliefs).
And those definitions must dictate consistent
 behavior and actions.

         In place of the voice of “authority”,
     stakeholders demand proof of authenticity

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        A CALL TO ACTION

     Arthur W. Page Society White Paper:
         “The Authentic Enterprise”




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A CALL TO ACTION
To be authentic an enterprise must:


     Define and instill company values
     Build and manage multi-stakeholder
      relationships
     Enable its people with “new media” skills
      and tools
     Build and manage trust


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     THE VALUE OF VALUES

     Arthur W. Page Society White Paper:
         “The Authentic Enterprise”




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THE VALUE OF VALUES


                     Our Credo
       We believe our first responsibility is to the
             doctors, nurses and patients,
     to mothers and fathers and all others who use
               our products and services.
     In meeting their needs everything we do must
                   be of high quality.


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THE VALUE OF VALUES




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THE VALUE OF VALUES




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THE VALUE OF VALUES


      Top down
      Bottom up
      Formal
      Informal
      Part of the vernacular




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     STAKEHOLDER RELATIONSHIPS

      Arthur W. Page Society White Paper:
          “The Authentic Enterprise”




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 STAKEHOLDER RELATIONSHIPS
     Aetna in the 90s

      Put customers and shareholders first
      Strong form managed care
        – Referrals
        – Pre-authorizations
        – Denials
        – “Mother, may I?”

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 STAKEHOLDER RELATIONSHIPS
     Anti Managed Care Backlash

       Physicians, patients rebelled
       Federal Patients’ Bill of Rights (PBOR)
       State mandates
       Jay Leno and David Letterman
       Helen Hunt and Jack Nicholson,
                  “As Good As It Gets”

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 STAKEHOLDER RELATIONSHIPS

     New CEO - A Doctor

       New values – The Aetna Way
       Balance the needs of ALL constituents
       New approaches:
           – Disease management
           – MedQuery
           – CDHC
       Settle lawsuit
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 STAKEHOLDER RELATIONSHIPS




         The New York Times
            May 23, 2003


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 STAKEHOLDER RELATIONSHIPS


     “The once notoriously stingy and fiercely
      unpopular company is now frequently
      cast as the country's most physician-
      friendly insurer.”

     BusinessWeek, Jan. 4, 2006
     By Jessi Hempel and Diane Brady




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 STAKEHOLDER RELATIONSHIPS

     How do you build relationships with
     disparate stakeholders?


      Be transparent
      Listen
      Look for common ground
      Be willing to change


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     ENABLE NEW MEDIA SKILLS

     Arthur W. Page Society White Paper:
         “The Authentic Enterprise”




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  ENABLE NEW MEDIA SKILLS
 Biggest Influence on Opinion about IBM
                                                                                                              Average
Influence Source                                        Brazil   Ger   Spain   Italy   India   Sing   Japan    Rank
 Personal experiences with company’s employees            2      1      1       1       2       1      1        1.3
 Analysts or professional organization opinions           1      2      3       2       1       2      2        1.9
 Opinions of colleagues, peers, or friends                3      3      2       3       5       4      3        3.3

 What companies are doing for others in your industry     6      8      4       7       4       3      6        5.4
 Company websites                                         5      6      5       8       3       5      10       6.0
 White papers, research, or case studies                  4      4      6       4       7       9      8        6.0
 Articles in magazines or newspapers                      7      9      10      9       8       6      4        7.6
 Online sources, not directly from the company           10      7      7       6       9       8      7        7.7
 Tradeshows, conferences, industry forums, events         8      5      9       5       6      10      11       7.7

News stories on TV or radio                              11      11     12     12       10      7      5        9.7
Advertising                                               9      10     11     10       11     11      9       10.1
Direct marketing (e-mail or mail)                        12      12     8       11      12     12      12      11.3

   IBM Survey of executives in seven countries

      35
We continue to advocate IBMers' responsible involvement today in this
new, rapidly growing space of relationship, learning and collaboration.




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     2008 IBM Social Media Guidelines




     Community-updated blogging guidelines to be inclusive of all forms of
     social computing: blogs, social networks, wikis, virtual worlds, etc.
•     In the spring of 2005, IBMers used a wiki to create a set of guidelines for all IBMers who wanted to blog. These guidelines aimed to provide helpful,
      practical advice – and also to protect both IBM bloggers and IBM itself, as the company sought to embrace the blogosphere. The guidelines were
      endorsed by IBM, posted internally and then shared publicly by our bloggers. Since then, IBMers by the tens of thousands have relied on these guidelines
      when blogging, as well as when engaging in many other forms of online publishing, discussion and interaction.

•     Now, three years have passed, and many new forms of social media have emerged. So this spring we turned to IBMers again, to re-examine our
      guidelines and determine what, if anything, needed to be modified. The result has been one new guideline, regarding online social networks, and a
      broadening of the existing guidelines’ scope to include other forms of “Web 2.0” social media.

1.    Know and follow IBM’s Business Conduct Guidelines.
2.    2. Blogs, wikis and other forms of online discourse are individual interactions, not corporate communications. IBMers are personally
      responsible for their post. Be mindful that what you publish will be public for a long time – protect your privacy.
3.    Identify yourself – name and, when relevant, role at IBM – when you discuss IBM or IBM-related matters. And write in the first
      person. You must make it clear that you are speaking for yourself and not on behalf of IBM.
4.    If you publish a blog or post to any website outside of IBM and it has something to do with work you do or subjects associated with
      IBM, use a disclaimer such as this: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies
      or opinions.”
5.    Respect copyright, fair use and financial disclosure laws.
6.    Don’t provide IBM’s or another’s confidential or other proprietary information. Ask permission to publish or report on conversations
      that are meant to be private or internal to IBM.
        37
ENABLE NEW MEDIA SKILLS


      Inside out
      Outside in
      R&D
      Internal consensus




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           BUILDING TRUST

     Arthur W. Page Society White Paper:
         “The Authentic Enterprise”




39
BUILDING TRUST



     “Trust no one.”

        -- The Wall Street Journal




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BUILDING TRUST
1890 – Sherman Act
1897 – ICC
1906 – FDA
1914 – Clayton Act
1934 – SEC, FCC
1970 – OSHA, EPA
1972 – CPSC
2002 – SOX
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BUILDING TRUST

Emerging “social contract”


1889 – Carnegie, “Gospel of Wealth”
1931 – Berle and Dodd, Harvard Business Review
1960 – Packard – “a contribution to society.”
1970 – Friedman – “Profits.”
1975 – Filer Commission
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BUILDING TRUST

Emerging “social contract”


Quality products and services at reasonable
 prices
Steady employment in a healthy and safe
 environment
Support for community institutions

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BUILDING TRUST
Breaking the contract


1980s – Leveraged buyouts, re-engineering,
 outsourcing, short-termism, executive
 compensation
1987 – Gecko – “Greed is good.”




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BUILDING TRUST
Breaking the contract
      Enron          – Lay & Skilling
      WorldCom       – Ebbers & Fastow
      HealthSouth    – Richard Scrushy
      TYCO           – Dennis Kozlowski
      HP             – Patricia Dunn
      MSO            – Martha Stewart
      UnitedHealth   – Bill McGuire

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BUILDING TRUST




     USAToday/Gallup, December 11, 2006.

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BUILDING TRUST
Trust in Institutions to Operate in
Society’s Best Interest
      Armed forces                                                      +43%
      NGOs                                                              +27%
      Education system                                                  +26%
      Health system                                                     +17%
      Trade unions/labor                                                +2%
      Legal system                                                      -2%
      Global companies                                                  -9%
     Accenture The Business of Trust, World Economic Forum Voice of the People Forum

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     * Net Rating = % trust - % distrust
DRIVERS OF CHANGE

U.S. Credible Spokespersons
                             Source: Edelman Trust Barometer 2008
     60

     50

     40

     30

     20

     10

      0
          Me   Acad.   Doc    NGO     CEO     Blog

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BUILDING TRUST

Corporate Social Responsibility
      Corporate philanthropy

      Cause marketing

      Environmental responsibility

      Good labor standards



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BUILDING TRUST


      Focus on the core contribution that the
       enterprise makes to society

      Align business objectives with the public
       interest




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BUILDING TRUST

      Aetna Chairman’s Initiatives
        • Genetic testing
        • Disparities in health care
        • Care at the end of life
        • Depression management
      GE Ecomagination
      ITT Global Water Leadership
      GM Volt
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     THE AUTHENTIC ENTERPRISE

       Arthur W. Page Society White Paper




52
 ARTHUR W. PAGE



“All business in a democratic society begins with
public permission and exists by public approval.”




 53
THE AUTHENTIC ENTERPRISE
How do you get “public permission” and
“public approval?”

     By being an authentic enterprise …

     … that operates in the public interest –
     doing the right thing for all stakeholders –

     ... and does it consistently – up and down
     the entire organization.

54
THE AUTHENTIC ENTERPRISE


     Join the dialogue at Page Turner:

       http://www.awpagesociety.com/awp_blog/

       http://www.awpagesociety.com




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THE AUTHENTIC ENTERPRISE
Putting $$$ on Green



Roger Bolton
APCO Worldwide

Zicklin Center for Corporate Integrity
Corporate Communications International
Baruch College
November 7, 2008
 56

				
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