Consumer brands heavyweight Procter & Gamble is done sitting on the social media sidelines. Recent rumors have revealed the company has determined that social media is the future of marketing. This isn’t surprising, with the great success and evangelism-charged growth of smaller, values-driven companies such as Seventh Generation. Fast-growing Seventh Generation is now also distributing to Wal-Mart and maintains a deep, authentic connection with its community via its popular newsletter, blog, CEO Jeffrey Hollender’s blog, community, and even Twitter. As a bonfire brand, it practically markets itself. Yet P&G has yet to put any serious effort in social media until right now.

P&G’s social media experiment is a campaign called Loads of Hope, in promotion of its Tide brand and benefiting Feeding America. The company flew over a hundred social media experts to Cincinnati headquarters to meet with brand managers, divided them into four teams and kicked off a fund raising competition via Twitter, blogs, social networks, etc., to drive traffic to one of the four tracking sites (tide1.com, tide2.com, etc.). The goal: raise $100k toward disaster relief and prove the value of social media. Of course, the bloggers and twitterers involved have plenty to gain by winning. By impressing the brand managers of the largest consumer brands company, they will improve their chances at winning a piece of the company’s over $6.7 billion annual advertising budget, as it tests the waters for a better way to market its products.

The campaign is certainly getting buzz as web influencers such as Federated Media’s John Battelle announce the great cause and their support for it (Battelle twittered that he will be buying 100 shirts), and any brand or product that ties its success to a worthwhile cause is probably worth supporting. Yet, this campaign requires that the consumer act first. So, if you buy a t-shirt and wear the “cool, hip, retro” Tide billboard around town, P&G will kick back a few bucks toward disaster relief. Sounds a bit like P&G wants consumers to buy the cow so it can drink feel-good-cause-fortified milk for free, don’t you think?

Check out one of the campaign videos:

This post was originally published on Triple Pundit.

Tuesday night sustainability leaders from all over the Bay Area made their way to the Berkeley facility of Clif Bar and Company to hear Gary Erickson, Kit Crawford (the husband and wife co-owners of the pioneering Clif Bar and Company) and Gary Hirshberg (President and CE-Yo of the tremendously successful and equally pioneering organic dairy producer Stonyfield Farms). The event, organized by the Good Business Network of sustainability decision makers and thought leaders, aimed to reveal the stories behind the entrepreneurs whom built wildly successful companies, from both financial and non-financial perspectives. The stories they shared were inspirational, of course, many of which I’d heard before or read in their books, Stirring It Up: How to Make Money and Save the World, published this year by Hirshberg, and Raising the Bar: Integrity and Passion in Life and Business: The Story of Clif Bar & Co.. I left convinced, however, that Clif Bar and Company and Hirshberg fundamentally disagree on the role of social responsibility in a company. The event by no means turned into a bloody fist fight (in which case my money would have been on on Kit), but left at least a few of us with an unsettled feeling that even some of the most respected people behind values-driven companies aren’t really working together.

Read the rest of this entry »

I’ve posted a response to sustainability thought leader Adam Werbach’s speech on “The Birth of Blue” on Triple Pundit, a well-read blog on green business and design from one of the creators of Treehugger.

Check out the post to learn about the movement that will soon supersede the taking-the-world-by-storm green phenomenon.

Earlier this week, prominent blogger Michael Arrington lashed out on Comcast after his service went down. Then something happened that I’ve never seen before.

Michael posted his frustrations on Twitter, a microblogging service that does what it sounds like it should do–enables blogging–but is limited to 140 characters and can be posted to via the web and SMS message. Twitter is commonly used to share quips and aha moments, especially those in the web’s public eye (like Arrington). He twittered:

Then, after 36 frustrating hours of downtime, many calls to Comcast’s customer service, who had kept him on hold for 30 minutes at a time and misinformed him that they were experiencing a California-wide outage (he had visited a nearby friend’s home whose Comcast service was functioning perfectly), he received a call. On the other end was a Comcast executive in Philadelphia who, claiming that the company monitors Twitter and blogs, sent a team out to his home to immediately fix his service.

In just a matter of minutes, a wildfire had erupted and been extinguished, thanks to Comcast’s reactive efforts.

The fire burning:


And finally:

In his follow up post on TechCrunch, Arrington then declares Twitter “an early stage warning system for brands and companies” and instructs readers to “skip the hold time on their customer service line and go on the attack at Twitter instead.” But Arrington is dead wrong, Twitter and the blogosphere are late stage warning systems. Sure, by following Twitter, Comcast was able to intervene before Arrington and his angry mob had followed through on their threats. But had Comcast proactively engaged in a dialog with its consumers, its failure to meet customer service expectations would have been made clear years ago (check out this YouTube video for one story).

It is natural to assume that someone with as powerful a voice as Arrington would expect companies to monitor and respond to his rants, but for the rest of us without 700,000 RSS subscribers and 12,000 Twitter followers? Reactive communication is not the answer.

Update: Comcast is actively participating in conversations with consumers via Twitter. This definitely doesn’t scale but is very interesting to watch unfold.

Starbucks has just launched My Starbucks Idea, the Salesforce Ideas-powered platform that lets consumers shape the future of its business. This new effort arrived just in time, as its brand and experience turned bland, trading quality and connection with consumers for explosive, world domination aimed growth.

Just like the platform that Salesforce built for Dell, My Starbucks Ideas allows consumers to suggest product, experience, and social responsibility ideas, engage in discussions with Starbucks representatives about them, and vote which ones are worth the company’s real consideration. Ideas that stick, theoretically, will be implemented.

The top ideas so far (as of Wed, March 19th):

1. Loyalty rewards, like buy 10 drinks get 1 free program
2. Free wi-fi
3. Free drink on your birthday
4. Automated drink order kiosk/system, to skip lines and pleasantries
5. Healthier breakfast

But are all Starbucks customers self-serving, free cafe mocha demanding line skippers? Nope, check out the top ideas for Starbucks’ social responsibility:

1. Recycle
2. Travel mugs as part of the Starbucks experience
3. Use less energy (suggested by a Starbucks employee who took the liberty of installing CFLs in his/her own store)
4. Glass, plastic recycling and compost bins in stores
5. Reduce waste–human health depends on environmental health

My Starbucks Ideas is a big, positive move for Starbucks for two reasons. First, Starbucks’ communication department tried to convince me last year that the company doesn’t need to invest in engaging its consumers online because it already touches millions of them in person every day. Wrong. According to the 2007 National Consumers League study, 79% of consumers are actively seeking information about companies’ social responsibility, looking online first. The conversation was simply happening online without Starbucks. Second, Starbucks’ focus on growth traded the authenticity of the brand and openness to feedback for higher, blander sales. Rather than listening to them, the company made consumers feel like activists for their concern about the environmental impact of their indulgences.

Social web technology is finally connecting people and companies again, as we connected with local store owners before the rise of globalization, big box retail, and the low, low prices we demanded. For example, the local coffee shops I frequent in San Francisco have listened intently to their customers, adding bins for recycling and compost, using biodegradable straws and to-go cups, serving drinks in real cups, implementing loyalty punch cards, and installing free wi-fi, because that is what consumers wanted. Meanwhile, Starbucks was building stores, serving blander coffee and experiences than ever before. Is it any wonder why Starbucks isn’t Wall Street’s favorite new toy anymore?

Yet, if Starbucks listens to what its customers and employees are saying, its dreams of a ubiquitous, Utopian experience that enriches lives might actually come true. Don’t take it from me, take it from Howard Schulz:

This is your place. Let’s see where we can take it together.

I’d like to consider something dismal. As we experience what many might call a “green revolution,” the most powerful companies in the world are reinventing their businesses to incorporate and communicate their values and commitments to use, waste, pollute less and do more for society in general. But what if the movement passes without any real progress, because consumers get overwhelmed with noise about carbon emissions, natural, organic, and products made from recycled content, and they simply can’t sift through the bullshit any longer? What if the companies truly dedicated to doing good never get their chance, drowning in the tidal wave of noise that they thought would lead their businesses to the opportunity to make a real impact on people’s lives?

While I’ve always hoped that principles of sustainability would be permanently incorporated in the core of successful business, I fear that the way they are communicated today is only deafening the ears of the American consumer.

The outlook of Timberland, a company that I have grown to love for its pioneering efforts as a responsible business, isn’t good. Well, there is both good news and bad news for the company.

The good news at Timberland is that they are still setting new precedents in responsible, transparent business. Timberland recently decided to cut out all the dense prose out of their reporting, which no one reads anyway, and to provide the cold, hard data that matters in a dashboard format on a quarterly basis, saving the analysis and summarizing for a report that is released every other year (don’t expect another one until 2009). This is good for stakeholders and it’s good for Timberland since data will be made available to stakeholders on a more timely basis and less of Timberland’s resources will be wasted on content that no one is reading anyway.

The bad news at Timberland is that, as the company’s revenues continue their decline, there is the possibility that the company could quickly lose sight of its values, especially those aspects of its brand with which consumers can create an emotional connection. I fear that the company could too easily turn itself into yet another company that makes products without any real meaning or substance as it receives increasing pressure from Wall Street.

From the outside, Timberland appears disturbingly confused. It’s a pioneer in sustainability and responsible business, yet few consumers really know it. And for those of us who do, and love what the company does, it’s hard to believe that Timberland is designing clothes for those of us who share its values. Its management could learn a lot from the fanatical consumer base of Seventh Generation, which has catapulted its revenues and appears to do everything in its power to create a meaningful connection with its consumers. Meanwhile, I can’t find a single Timberland product that I like (or can afford, since I pretty much rule out all $30 t-shirts on sheer principle). It appears that while the rest of industry is touting their achievements in green, Timberland, a leader with the disposition of an awkward teenager, is still trying to find its voice.

If I were Jeffrey Swartz, Timberland’s CEO, I would build an entire department (how about a VP, Consumer Relationships) to focus on creating a meaningful connection with consumers (online, duh, it’s 2008), and let those connections guide the future of Timberland’s products, not the other way around.

I fear that as the green arms race presses on, consumers will become desensitized to companies’ achievements in sustainability because the medium, traditional advertising, trades authenticity for distribution, while never really engaging consumers in a meaningful way. I am scared by the possibility that Timberland and other values-driven companies will never drive or influence the future of business because when consumers were listening most intently, an army of companies sounded fog horns from inches away, without thought or knowledge of what the consequences might be, turning green into a throw away love affair, when it could have instead led to a wonderful long term, committed relationship between enterprise and our Earth.

Disclaimer: I value your trust in the objectivity of my writing. Please note that our company, BIG Inc., has relationships with and is in discussions with Timberland about its CSR communications. Yet, I didn’t sugar coat my thoughts above and was, if anything, more critical. I guess you could call it a bit of tough love.

Its all over the news. The largest recall of beef in history has been ordered, 143 million pounds, by California meat producer, Westland/Hallmark Meat Company.

The video, taken by a worker at the cattle slaughterhouse, was released by the Humane Society, reveals cattle too sick to stand or walk (called “downers” by industry) being “kicked, beaten, dragged with chains, shocked with electric prods, sprayed in the face with hoses, and rammed by forklifts in efforts to get them to their feet to pass USDA inspection.” Basically, we’ve been eating beef that would not have otherwise passed USDA inspection, and that includes school children too, if you hadn’t yet lost your appetite.

The meat of this story actually has nothing to do with the recall. The Times quoted Dr. Richard Raymond, the Agriculture Department’s under secretary for food safety, saying “the great majority has probably been consumed,” and I’m betting that less than 1% of the meat will actually be disposed of. This story is about YouTube transparency. Whether we like or not, consumers now have more access to the vivid footage and raw information that will continue to put into question the moral and social implications of our behavior, as individuals, society, and corporate America at large. While we may have been able to remain comfortably oblivious to the real story about how our meat actually got to be wrapped in cellophane and styrofoam yesterday, today we get to see the YouTube compliment to Michael Pollan’s Omnivore’s Dilemma, and it makes one’s stomach turn.

This is just the beginning. If CEO John Mackey says that even the farms that supply the health (but not so much price) conscious shoppers of Whole Foods have “a long way to go,” the media explosion we’re watching right now is only an indication that the information gap between consumers and farmers is about to be closed, or at least significantly narrowed.

It comes down to transparency, not standards. Westland/Hallmark has replaced its entire website with a public statement made by its President, Steve Mendell. Clearly, farmers are a decade or two behind in their corporate communication strategies. The hugely disappointing aspect of the response isn’t its “safe” or somewhat defensive nature, arguably a cause for more consumer distrust, but its focus on food standards. This recall isn’t about FDA standards–apparently, those can be manipulated–it is about the complete lack of transparency and information that has led us to eat food that we likely would not have otherwise.

CEO Mendell’s letter on Westland/Hallmark’s website:

WESTLAND/HALLMARK MEAT CO.

February 3, 2008

As President of Westland/Hallmark Meat Co. I want to reassure our customers and consumers that our company has met the highest standards for harvesting and processing meat under the Federal Meat Inspection Act. A fulltime USDA veterinary medical officer has been assigned to our facility for many years, and he oversees the work of three inspectors in the harvest operation and another inspector assigned to the processing operations. In addition, we have had a full time official from the USDA’s Grading Service in our operation for the purpose of ensuring contractual compliance for the meat we sell to the USDA commodity program.

During 2007, we had 17 third party audits of our operation to confirm that we meet the statutorily mandated humane handling and food safety standards. In addition we have conducted 12 internal audits by our own personnel to ensure that such standards are met. We also, conduct weekly humane handling audits based on standards set forth in the American Meat Institute’s (AMI), Recommended Animal Handling Guidelines and Audit Guide 2007 Edition, which was authored by Dr. Temple Grandin, a world renowned expert of humane handling practices. Complete documentation of this activity has been made available to the USDA investigation team currently at our plant.

Words cannot accurately express how shocked and horrified I was at the depictions contained on the video that was taken by an individual who worked at our facility from October 3 thru November 14, 2007. We have taken swift action regarding the two employees identified on the video and have already implemented aggressive measures to ensure all employees follow our humane handling policies and procedures. We are also cooperating with the USDA investigators on the allegations of inhumane handling treatment which is a serious breech of our company’s policies and training.

As part of our own investigation, we have retained an outside consultant to take an independent look at our operations. He is a veterinarian who worked for FSIS in a supervisory position for 26 years all over the U.S. He spent two days in our facility with full and free access to all documentation and plant personnel. He told us in a written report that our records and programs are “the best he has ever seen in any plant.” We have provided his report to the USDA.

We have voluntarily suspended our operations pending the completion of the USDA investigation. We are dedicating our full efforts and resources to fully cooperate with the USDA investigative team that has been assigned to our plant.

Finally, I proudly assure our customers that we comply with all USDA requirements, including the requirement that only ambulatory livestock may enter the harvest facility to be processed for human food. I am confident that we have met this high regulatory standard.

Steve Mendell

President

Westland Meat Co.

Hallmark Meat Packing

Welcome to the future of corporate social responsibility (CSR). It’s changing the way we live, work, and now… eat.

Guy Kawasaki, author of the Art of the Start, a book that demystifies how to start a technology company in real language, recently had a guest post on his blog that is worth studying, called the Top Ten Myths of Entrepreneurship.

Here are the top ten myths, as plagiarized from Scott Shane’s guest post on Guy’s blog:

1. It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going. The successful entrepreneurs who don’t believe the myth design their businesses to work with little cash. They borrow instead of paying for things. They rent instead of buy. And they turn fixed costs into variable costs by, say, paying people commissions instead of salaries.
2. Venture capitalists are a good place to go for start-up money. Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars, and seventy-two percent of the companies that got VC money over the past fifteen or so years. VCs only fund about 3,000 companies per year and only about one quarter of those companies are in the seed or start-up stage. In fact, the odds that a start-up company will get VC money are about one in 4,000. That’s worse than the odds that you will die from a fall in the shower.
3. Most business angels are rich. If rich means being an accredited investor –a person with a net worth of more than $1 million or an annual income of $200,000 per year if single and $300,000 if married – then the answer is “no.” Almost three quarters of the people who provide capital to fund the start-ups of other people who are not friends, neighbors, co-workers, or family don’t meet SEC accreditation requirements. In fact, thirty-two percent have a household income of $40,000 per year or less and seventeen percent have a negative net worth.
4. Start-ups can’t be financed with debt. Actually, debt is more common than equity. According to the Federal Reserve’s Survey of Small Business Finances, fifty-three percent of the financing of companies that are two years old or younger comes from debt and only forty-seven percent comes from equity. So a lot of entrepreneurs out there are using debt rather than equity to fund their companies.
5. Banks don’t lend money to start-ups. This is another myth. Again, the Federal Reserve data shows that banks account for sixteen percent of all the financing provided to companies that are two years old or younger. While sixteen percent might not seem that high, it is three percent higher than the amount of money provided by the next highest source – trade creditors – and is higher than a bunch of other sources that everyone talks about going to: friends and family, business angels, venture capitalists, strategic investors, and government agencies.
6. Most entrepreneurs start businesses in attractive industries. Sadly, the opposite is true. Most entrepreneurs head right for the worst industries for start-ups. The correlation between the number of entrepreneurs starting businesses in an industry and the number of companies failing in the industry is 0.77. That means that most entrepreneurs are picking industries in which they are most likely to fail.
7. The growth of a start-up depends more on an entrepreneur’s talent than on the business he chooses. Sorry to deflate some egos here, but the industry you choose to start your company has a huge effect on the odds that it will grow. Over the past twenty years or so, about 4.2 percent of all start-ups in the computer and office equipment industry made the Inc 500 list of the fastest growing private companies in the U.S. 0.005 percent of start-ups in the hotel and motel industry and 0.007 percent of start-up eating and drinking establishments made the Inc. 500. That means the odds that you will make the Inc 500 are 840 times higher if you start a computer company than if you start a hotel or motel. There is nothing anyone has discovered about the effects of entrepreneurial talent that has a similar magnitude effect on the growth of new businesses.
8. Most entrepreneurs are successful financially. Sorry, this is another myth. Entrepreneurship creates a lot of wealth, but it is very unevenly distributed. The typical profit of an owner-managed business is $39,000 per year. Only the top ten percent of entrepreneurs earn more money than employees. And the typical entrepreneur earns less money than he otherwise would have earned working for someone else.
9. Many start-ups achieve the sales growth projections that equity investors are looking for. Not even close. Of the 590,000 or so new businesses with at least one employee founded in this country every year, data from the U.S. Census shows that less than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for. About 500 firms reach the $50 million in sales that the sophisticated angels, like the ones at Tech Coast Angels and the Band of Angels talk about. In fact, only about 9,500 companies reach $5 million in sales in that amount of time.
10. Starting a business is easy. Actually it isn’t, and most people who begin the process of starting a company fail to get one up and running. Seven years after beginning the process of starting a business, only one-third of people have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months.

The theme that resonates well for me, having bootstrapped Dotherightthing Inc. with Rod for two years now, has to do with financing your business. As stated in the first myth, starting a business really isn’t as expensive as you think. Want to get started? Rather than spending months writing a business plan and chasing investors, test your business model immediately. If you really think you can sell your widgets to Fortune 100s, stop writing about it and wasting time with investors and start taking orders. The simple truth is that most startups don’t make money exactly as their founders originally plan, especially in their early stages when business models amount only to post it notes on a wall, until they start bringing in signed contracts and checks in the mail.

As myth number five states, banks actually do lend to startups. But like any stakeholder, they want to see you do something on your own dime first. They do this by offering startups that have been in business for some length of time–6 months, a year–before extending credit. Want to have access to credit later? Incorporate and open your business checking account now. You’ll be glad you did when you wish you had access to one of those 0% balance transfer offers for your business, with no collateral or risk to your personal credit.

So, now that many of the reasons that have kept you from starting your business have been shot down, are you ready to start changing the world?