Wednesday, 27 April 2011

Competitive Intelligence: fixing on a formula

Only two senior executives are supposed to know the recipe for Coca-Cola. The US beverage company forbids them to travel on the same plane in case the mythical formula should go down with them. Now the best kept secret in corporate history is out (or so a US radio show would have us believe). All along, the ingredients for inventor Dr Pemberton’s fizzy magic were tucked away in the pages of his local newspaper. So now we all know: just a splash of cinnamon and Neroli oil, a drop of coriander, orange and lemon, a tea-spoon of alcohol and – hey presto – the ‘real thing’.

Hogwash, says Coca Cola. It would. For more than a century, the company has kept the world guessing. Such uncertainty does wonders for marketing. Yet, in today’s competitive, dog-eat-dog world, the days of corporate confidentiality seem to be fast disappearing. Renault in France, Rio Tinto in China and Sears in the US are just some of the big names to have found themselves embroiled in recent espionage scandals.

It’s natural to want to know what your competitors are up to. Some even say it’s an ethical obligation. (Willful ignorance leads to uncompetitiveness, which leads to shortchanged shareholders, the argument runs). Yet where to draw the line? It’s not easy, admits Rajesh Chhabara in the latest issue of Ethical Corporation. Especially in an environment where ‘competitive intelligence’ companies are out hawking their investigative services.

One basic rule of thumb: if you came by the information ethically, it’s probably okay. And, in the internet age, there is a mountain of publicly-available data out there – if you’ve the time, energy and expertise to go looking for it. If your means were dubious (think: theft, spying, phone tapping, computer hacking, etcetera), then you’ve almost certainly overstepped the line. There are guidelines out there. Surveillance firms have a code of ethics courtesy of US trade group, the Strategic and Competitive Intelligence Professionals. Corporations are developing their own norms too. Training staff, developing approval processes and conducting regular cross-functional reviews are just three of the ten best practice suggestions featured in a recent report by the Institute of Business Ethics.

Chhabara weighs up other angles too. How might companies misuse information collected legitimately, for instance? Or where does collecting information on campaign groups cross the line? (Greenpeace recently sued several companies, including Dow Chemical, for espionage.)

Sophisticated software is making it easier for those with criminal intent to steal competitive information. On the other hand, it’s also enabling companies to better protect their private data. In our high-tech age, however, good old honesty still goes a long way. Like when PepsiCo was offered stolen trade secrets from a disgruntled Coca-Cola employee. It could have paid the asking price. Instead it phone the FBI. Now, in ethical terms, that’s surely the real thing.

Thursday, 14 April 2011

The CSO: sustainability’s new breed of top dog

I recently put a call into Raffaello Raimondi. In an ideal world, it’d be him phoning me. Or you. A top headhunter at recruitment specialists Allen and York, he has the job of picking out the next big things in corporate sustainability.

We’re not talking the typical ‘CSR’ function here. The last ten years have seen a troop of hard-working, well-meaning folk fill the tiers of middle management. And welcome, they are. These are corporate responsibility’s in-field commandos: managers that grapple with the guidance notes for GRI's version G3.1 and crack heads to get a community involvement project off the ground. All this in the hope of making their companies more responsible.

No, Raimondi’s focus is further up the chain of command. An increasing number of corporate clients are asking him to find someone for the C-Suite. His successful candidates have a daunting job spec: shift their corporations onto a sustainable footing. That’s no small task. “Top to bottom change”, is how Raimondi describes it. Hence the leadership team post. ‘Chief Sustainability Officers’ or CSOs (as they are increasingly being called) have the boardroom clout to get things done. Or so the theory (and their handsome salaries) runs.

So who are the high fliers in Raimondi’s rollerdex? Few, you may be surprised to know, have the term ‘sustainability’ in their current job titles. Time in the ‘CSR’ trenches is not a prerequisite for today’s CSOs. Think instead: exceptional management skills (the soft bit), hands-on industry experience (the technical bit) and a ‘big picture’ view of corporate strategy (the brains bit). So would the typical CV look like? Here’s Raimondi’s tick list:

* A decade or so running process-driven operations in a large company – that’s a given.
* A respectable MBA - ditto.
* A stint with a strategic or environmental consultancy - preferable, though not essential.
* Oh, and evidence of a passion for matters sustainable.

Got all those and it might just be worth waiting by your phone for the call to come.

For more on the skill set, background and job spec of the emerging role of Chief Sustainability Officer, read the Strategy & Management feature article in Ethical Corporation’s latest issue.

Saturday, 9 April 2011

Selling sustainability to the c-suite

Sustainability needs to be led from the top. That’s not rocket science. It’s a simple fact of corporate life. Whatever the policy area, if it doesn’t have a green light from the board, it ain’t gonna happen. Get the go-ahead, however, and once closed doors magically start opening. Look at the likes of Unilever, Kingfisher, Swiss Re, Pansonic, Patagonia – all are sustainability leaders, all have vocal, pro-sustainability CEOs.

But what if you find yourself on the other side of the fence? What if your board thinks an annual Charity Day and a tree planting outing is enough to tick the sustainability box? Let’s face it, despite what CEOs might say (93% claim to think sustainability will be “critical” to their future business success, according to a recent-ish UN study), board ambivalence is frequently the norm.

Some business leaders just don’t buy it. Ryan Air’s Michael O’Leary famously referred to man-made global warming as ‘horseshit’. But for most, it's more likely that they just don’t get it. Sustainability sounds fluffy and nice, but irrelevant to their quarterly targets (and annual bonuses, for that matter). Which is why Ethical Corporation columnist Mallen Baker advises would-be sustainability advocates to ensure their business case is absolutely watertight. Company leaders won’t abide wooly thinking. That’s what makes them company leaders. So “Drill and drill” until you have the “hard proof you need”, Baker quotes one leading sustainability practitioner as saying.

Other tips include finding some quick wins that prove sustainability can tangibly impact the business bottom line. Benchmark too. Senior executives hate to think the competition is out ahead. And go public. Chief executives typically have short shelf lives. It’s much harder for a new appointee to backtrack if the world has already been told about your sustainability commitments.

Selling sustainability to the C-Suite is not always easy. But there are harder tasks out there. None more so than trying to implement sustainability without boardroom backing.