Alan Mitchell: Reinventing marketing - Brands caught in a moral minefield

Events such as the Arab Spring and riots in England raise fundamental questions about the role of corporations in society.

It is 27 January 2011, and the atmosphere is tense. Demonstrators are playing a cat-and-mouse game with the police. The army is waiting in the wings. The world is watching. In this volatile situation, speed of response matters. Then, just as the demonstrators feel they are getting the upper hand, their communication lines are cut. They feel isolated. They are isolated.

Vodafone defended the decision to switch off its network in the country, saying: 'Under Egyptian legislation, the authorities have the right to issue such an order, and we are obliged to comply with it.'

Many were still outraged. BBC technology correspondent Rory Cellan-Jones wrote: 'For millions in countries like Egypt, the ability to get instant access to information which could change the shape of their lives is becoming as much of a human right as access to clean water.'

Vodafone's brand reputation was being crushed between a rock (what the government/law told it to do) and a hard place (what its customers wanted it to do). Sites like IHateVodafoneEgypt.com (tagline: 'Fail is what they do best') still flourish.

Government censorship

Vodafone is not alone. During the recent England riots, BlackBerry and Twitter came under fire not for cutting communications, but for failing to do so. To gain a foothold in China, Google accepted government censorship of its search results, despite its unofficial brand mantra 'Don't be evil'. In August 2011, internet service providers complied with the Argentinian telecoms regulator's instruction to block access to blogs reporting on leaked government emails, after a federal judge's order.

In the UK, ISPs TalkTalk and BT sought, but failed to get, a judicial review of Ofcom regulations that require them to 'shop' persistent illegal file-sharers. Part of their concern was commercial: only the biggest seven ISPs are covered by the regulation, encouraging what BT called 'churn' to smaller providers. Part of it was ethical, however. Is it right, as one consumer put it, that customers should 'subsidise their own ISP to spy on them for a private third party' (in this case, copyright holders)?

What about Tesco Clubcard data? Earlier this year, Tesco fended off government requests to share Clubcard data to assist its campaigns on healthier living. Tesco's refusal ostensibly put its relationship with its customers ahead of the health of the nation. How should brands manage such morally fraught fracas with governments?

Of course, these situations are not new. From the day multinational organisations ventured beyond their home shores they did business with unsavoury characters, including governments, accommodating a wide range of norms that were frowned upon at home. How do you flourish in a business environment where bribery is the norm? They've also had to manage conflicts between stakeholders' interests and socially responsible values along the way.

Today, however, these debates are played out in chiaroscuro online, and the dilemmas they raise are being ratcheted to a new level. It may be inarticulate, hazy and partial, but there is a sense in which consumers now feel that they are the 'owners' of the brands they buy; that it's not just the brand's job to deliver a desirable package of functional benefits. It should also deliver desired values and social interventions.

Brands, and the companies that own them, are escaping traditional boundaries of narrow profit, and even reputational, calculation. They are becoming moral actors, judged by moral as well as commercial considerations.

One way to navigate this moral maze is via a simple but powerful and pragmatic rule of thumb: wherever you are, abide by the law of the land. As Jim Donaldson, Europe, Middle East and Africa vice-president of corporate communications at Weber Shandwick, argues, Vodafone had no choice but to cut the connection in Egypt. 'It didn't want to do it, but it had to. It was part of its licensing agreement.'

Yet legal compliance is not a foolproof get-out clause. Companies that complied with the law in Nazi Germany were pilloried, not excused. Legality does not absolve us of morality, a point not lost on the human-rights protests against Vodafone.

Brands, therefore, need a moral as well as a legal compass. That's hardly a welcome or easy debate for any boardroom, but organisations need to know that, if they have to draw a line, they know where that line is.

Articulating these values is the opposite of PR puffery, observes brand consultant Nicholas Ind, because 'it strikes at the heart of the company's core decision-making and, potentially, its operational existence'.

The third level of response is communication. Vodafone's case was not helped by an ill-conceived JWT video implying that the products of communications companies such as Vodafone were responsible for the Arab Spring. 'Thanks for claiming you inspired the revolution when, in fact, you caused the death of martyrs by cutting off communication,' said one of the more polite posts on IHateVodafoneEgypt.com.

On the other hand, well-managed communication can help brands weather such storms, argues Michael Barnett, professor of strategy at Said Business School, Oxford. 'So long as the firm can convey that it has no choice, despite its best efforts to fight it, then it can shift blame to the government and possibly even gain in the eyes of stakeholders by appearing as their champion in a fight against an overbearing government.' For example, a company can be seen to be lobbying hard against a law, even while complying with it.

Behind that, a simple strategy of transparency and openness can go a long way, says Ind. 'If the brand doesn't know what the answer is, don't keep it inside. Open it up and say: "Let's have a conversation about it, both inside the company and outside."' These conversations might not come up with a definitive answer, he says, but the process can take some of the heat out of the situation.

Yet heat there will be. In this territory, no matter what you do, one man's meat is another man's poison. As Joe Sinclair, director of digital at Burson-Marsteller, points out: 'The same newspapers that were pillorying Vodafone for cutting communications in Egypt during the uprising were pillorying BlackBerry and Twitter for not cutting communications during England's recent riots.'

When Google accepted Chinese government censorship of its search results, it was widely accused of trashing human rights. When it changed its mind in early 2010, moving operations to Hong Kong to escape censorship, the Chinese government accused Google of 'imposing its own values and yardsticks on China'.

Behind this conflict lies a bigger issue.

As the power of governments declines relative to that of global corporations, we are moving toward 'an almost science-fiction situation', suggests Donaldson, where we look to corporations more than governments for guidance as to how we live our lives. Clashes between what some governments want and what corporations and their customers want 'will only become more challenging'.

'This is an incredibly complex, difficult issue that goes to the heart of the question: "What is the role of the corporation in modern society?"' he says. 'It's a hornets' nest, but you have to jump in and deal with it.'

Alan Mitchell is a respected author and a founder of Ctrl-Shift and Mydex.


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