Networks of trust

Social media are changing the way businesses and consumers talk to each other, not least on issues of corporate sustainability, say John Elkington and Alex Hammer.

“Open is good, closed is bad.” It isn’t exactly the sentiment you expect to hear from a former top Shell executive, but when Björn Edlund took the stage at the first conference on social media and stakeholder engagement organised by internet platform JustMeans, he was almost painfully honest. He argued that “large corporations are obsessed with control, rather than conversation" but that business thinking is beginning to shift.

And not before time. When our consultancy SustainAbility first looked at corporate reporting and engagement over the Internet back in 1999, we quoted New Economy guru Kevin Kelly on the report’s cover: “The network economy is founded on technology, but it can only be built on relationships. It starts with chips and it ends with trust.”

If anyone read that as a prediction that hardware, software and websites would automatically merge the world views of business and society, they badly misunderstood. Every new disruptive technology can be both an ally and an enemy for business and with much more interactive Web 2.0 technologies now erupting all around–and boosting the possibilities for information-sharing and collaboration on the internet–there is a need to take a look at those fast-moving objects and trajectories on our radar screen.

Fully a decade after that first adventure in the hype-saturated, soon-to-crash world of the New Economy, SustainAbility returned to the topic. In mid-2009, we conducted research on the implications and applications of the new wave of social networks on corporate accountability and transparency, with the trust equation very much in mind.

Our conclusion was that, while the business case for social media was still emerging, there were major opportunities for greater transparency, engagement and collaboration. Harnessing these opportunities requires companies to engage in genuinely honest, open and, perhaps, difficult dialogue, not simply to use these channels to broadcast messages. Indeed, the hardest concept for many companies to grasp is the idea that they should accept some loss of control, that allowing the conversation to evolve unedited, ensuring an unfiltered and often self-balancing exchange, offers the richest opportunity to gain feedback from advocates and critics alike.

What a difference a year makes in this space. We now watch companies opening up to the world of social media and networks in ways that would have seemed extraordinary last year. Back at the JustMeans conference, Tim Johns, vice president of corporate communications at multinational corporation Unilever, agreed that social media is “stronger when you concede control than when you manage it”. Or consider clothing brand Timberland, with its Voices of Challenge platform, which has opened itself up for discussion and challenge on key sustainability issues ranging from supply-chain labour standards to climate-change policy.

But even the most sophisticated companies sometimes struggle with social media. Anyone following Nestlé’s Facebook page saw in March what can happen when companies try to seize control of the conversation. In response to the moderator’s demand that participants stop altering Nestlé logos, one participant eloquently tried to educate Nestle on the benefits of social media: "Social media is about embracing your market, engaging and having a conversation rather than preaching.” Unfortunately the moderator did not share this view and responded: "Thanks for the lesson in manners. Consider yourself embraced. But it’s our page, we set the rules, it was ever thus." An explosion of comment followed, together with an apology from Nestlé.

The Timberland and Nestlé examples illustrate some of the ideas advanced by Nicholas Christakis and James Fowler in their new book Connected. The authors call social networks “intricate things of beauty" and “a kind of human superorgansim” with two key characteristics: connections, both short-lived and life-long, and contagion, a measure of the extent to which those in networks interact and influence other networks.

In both cases the companies achieved connections. Nestlé’s Facebook page has over 90,000 surprisingly active fans and the Timberland site has attracted a wide range of participants. Both also achieved a degree of contagion through the viral nature of blogs and Twitter that transmitted the stories beyond the confines of the individual sites. It was the tone and approach that positioned Nestlé on the wrong side and Timberland on the right side of this equation.

The social media revolution is levelling the playing field, giving a broad range of stakeholders the opportunity to initiate and drive conversations with, or around, companies. As companies try to navigate their way in the new world of social networks, they should find comfort in the fact that the rules have not changed and the keys to building interest and trust are still rooted in honesty, transparency and candour.

One area of business that this shifting landscape will impact profoundly, we suspect, is the process of reporting on corporate sustainability and tools used to do so. Radical new forms of transparency and accountability are being experimented with, as in the case of the United States’ Open Government Initiative, which, among other things, enables citizens to track many different aspects of what president Barack Obama’s administration is doing, including its initiatives on sustainability and green jobs. We are seeing glimmers of hope in the corporate world as well with software provider SAP collaborating with the Carbon Disclosure Project (CDP) on a number of new technologies including a mobile phone application that allows consumers to access CDP data on demand.

But how can we make market transparency contagious, make it viral, over a broader front? This is an area we are exploring at Volans and SustainAbility in two projects in tandem with the Global Reporting Initiative (GRI), which produces sustainability reporting guidelines for businesses. The first, the GRI’s Readers Choice Awards, examines the current state of reporting. The second, entitled The Transparent Economy, investigates where market and business transparency will take us over the next decade. The work is supported by Dow Chemical, headquartered in the United States, Danish healthcare company Novo Nordisk, and Germany-based SAP. The launch of the printed report is planned for the GRI annual conference in Amsterdam in May.

A printed report, you ask? Well, yes, but we are also investigating how we can exploit the cutting edge of social media to present our findings and engage in an expanding set of conversations worldwide. Don’t turn off your computer yet.

John Elkington is executive chairman of Volans and non-executive director of SustainAbility. Alex Hammer is an analyst at SustainAbility, specialising in social networks.

Homepage image from webtreats