« More on climate theory   |   Main   |   Best (photo) blog ever »

NGO Boycotts, Davos, and Diamonds

Not since my undergraduate studies in International Relations have I read so much about NGO’s (non-governmental organizations) as I have this week. I admit I’m puzzled why they would step into focus right now.
This month’s Harvard Business Review has an article arguing persuasively that companies can benefit from engaging NGO’s directly as partners. They cite the avoidability of the huge PR snafu that was Shell’s Brent Spar affair back in 1995, when Greenpeace and other activists opposed Shell sinking the disused structure, in favor of dismantling it (for more info see an archived BBC News story). That’s fine and interesting, but typically outside of my focus in that it impacts large companies that make good targets.
Our second piece is from Bain and is yet another piece from Davos, which seems to serve as an annual term-paper deadline for a decent amount of research. In the paper, James Allen posits that the old view of supply chains as “corporate obligations toward the communities that supply important products or services and the need to make those communities sustainable” is unworkable. He puts forth a slightly modified view, ” a broader definition of value chain accountability, which extends beyond supply sources to include networks of distributors and consumers. In an increasingly multinational environment, CEOs must constantly balance their efforts between consumer and supplier communities.” To deal with this change, Bain’s research suggests 6 themes:

1. Focus on brands, not boycotts - NGO boycotts might hurt less in revenue, but strongly impact customer perception of your brand
2. Build values not departments - you will do less damage control (not all that effective anyway) if your culture is sensitive to these issues from the ground up
3. Define borders and battleplans - they suggest a model of some complexity here that might be best summarized by focus your risk minimization efforts on the most important part of your business
4. NGO’s are NGO’s - they cannot be fully co-opted, and must indeed retain the full appearance of disinterest. Given this, and how extraordinarily useful publicity is for their causes, your interests often remain starkly divergent; deal with them only when interests align.
5. Implementation - even once senior management decides to ‘do the right thing’, you need to have processes in place to ensure that this policy is put in place across the organization. Incentives and goals (such as missions to take costs out) need to be adjusted to reflect this commitment.
6. Corporate Social Responsibility redefined? - will the expenditures entailed by the above recommendations grow to take the place of more traditional good neighbor gestures such as supporting the arts and other organizations?

For me, the best part of this article is his use of the term ‘conflict diamonds’. I had previously only heard the juicier term of ‘blood diamonds’ applied to these extra-DeBeersian stones. A stunning example of the power of marketing either way, both names are highly evocative. These stones are the ones supposedly smuggled out and traded for guns and other terrible things. Personally I remain unmoved, as I am suspicious of cartels like DeBeers as a rule. I hold out my hope - both personally, economically, and technically - for the approaching availability of lab-created diamonds. Read the article from last fall, if you haven’t already, and perhaps Neil Stephenson’s Diamond Age.

Sources: HBR’s Turning Gadflies into Allies, Bain’s Responsible Value Chain: What Are You Accountable For?, the BBC’s Brent Spar gets chop , and Wired’s The New Diamond Age.