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The Values Deficit

Reconciling the need for financial value with social values that drive reputation

Creating value is the foundation stone of all business – to make or grow something, to provide a service, to improve daily life.

This is the drive that results in surplus that can be traded and that has resulted in the interdependent global market in which we live.

But there is more to what is ascribed a value. To paraphrase the Bible, “man does not live by bread alone”. We seek community, family, security and, for some, spiritual certainty and fulfilment. To achieve those ends in a civilised society we develop a set of beliefs, behaviours and ethics; a guide to our actions. We give those actions value, typically based on what we perceive the results to be either good or bad.

Whilst there may be some cultural relativity, the core social values that are supposed to guide most of us are fairly common. Honesty, respect, tolerance and fairness are seen as essential social values. Their importance is attested to by the distress and anger caused when any, or a combination of those values are demonstrably absent in the actions of others. That is why we characterise such behaviour as criminal and seek to punish it and stamp it out.

The modern global village is made up of individuals, states and corporations. In the developed world we expect the same social values to drive ethical and fair behaviour by all. We probably hold the non-individual actors (i.e. governments, corporations et al) to a higher standard, particularly given the disproportionate power they wield. Amongst those who state that with great power comes great responsibility are Winston Churchill, Theodore Roosevelt and Spiderman.

That is where companies can find themselves in major trouble. In the drive to create monetary value, shareholder value and personal value for executives, they may forget the imperative to fit within the prevailing social values. That is, there is a Values Deficit TM. When that happens corporate reputation can, and usually is, destroyed.

The 24-hour news cycle means that corporate misbehaviour will quickly gain broad exposure and, sadly, there is no shortage of examples. The result is that not only are organisations held to a higher standard, but the general disposition of most of the community towards them is inherently cynical.

To gain and maintain trust, companies must align their values to community expectation and not only live those values, but also be seen to live them. When that does not happen we regularly hear complaints about a negative and poisonous corporate culture. Complaints that can justify the business equivalent of a lynching, or, at the very least, a pelting with rotten fruit.

Not aligning with expected social values, yet still seeking to profit from the community that shares them, is the Values Deficit TM that can turn any business into a market pariah.

Any organisation that does not do a regular check of its values, the culture those create and assess if its actions and messages convey the desired values, runs a serious risk of drifting into a Values Deficit TM. The very nature of fast-paced competition can hasten that drift and create damage to reputation before it is even realised.

RMKA are highly experienced in working with organisations to assess expressed and lived values and to communicate values alignment with the communities and stakeholders that support any organisation’s licence to operate.

DATA CRISIS MANGEMENT

Is your data crisis management plan in the clouds?

Australia’s ‘catch-up’ with the digital age highlights the power of information security to make or break your business plans today. China’s recent cyber attack on the Bureau of Meteorology’s computers – although denied by China – is a timely reminder to all Australian businesses and governments that such actions can compromise sensitive systems across the whole public and private sectors.

The much welcomed recent moves by academia, business and government for Australia to ‘catch-up’ with other nations in the development of our technology innovation sector brings this to the fore even more.

It is reinforced by Prime Minister Malcolm Turnbull’s announcement of a push to protect the nation’s commercial and strategic secrets from cyber attack.

Digital crisis management now should be high on the agendas of all risk committees.

As we move towards the magical 2020, issues and crisis management plans can mark the difference between business success and failure in effective responses to digital attacks.

The Melbourne-based information security firm Trusted Impact highlighted in a recent survey that key business objectives, such as revenue growth, product quality, time-to-market, customer loyalty, company reputation and shareholders value are all at risk if information security is not interwoven into the fabric of the digital organisation.

The pace of change is such that in the past decade, we have lost iconic brands, such as Encyclopaedia Britannica, Kodak and Yellow Pages to the digital age. Their demise highlights the adage that a ‘stitch in time, saves nine’ is just as relevant today as it was in the 18th Century when it was used as an incentive to the ‘lazy’ to fix a small hole before it became a larger one.

The ‘lazy’ organisations today will quickly have large reputational problems tomorrow because of global news services if their IT, communication and management people are not aligned in their mitigation responses.

The very nature of organisations moving more and more data to Cloud is a perfect example of the need to ‘be aligned and prepared’. Losing visibility as to who has access to your data in Cloud poses the question: “How do you do ‘incident management’ in a cloud environment?”

This question illustrates the large gap between those who will respond WELL to an incident to those that respond POORLY. A clear strategy as to how to develop and implement the issues and crisis management plan for 2020 is today’s ‘stitch in time’.

MELBOURNE AUSTRALIA - DECEMBER 11 2014: Australian Prime Minister Tony Abbott during a meeting with the President of Ukraine Petro Poroshenko in Melbourne

Tony Abbott: Architect of his own Demise

It is impossible not to feel for Tony Abbott after the events of Monday this week. There is no doubt that he is a well-intentioned man with, what he considered to be, the nation’s best interests at heart.

It must be acknowledged how devastatingly effective he was as an Opposition Leader; albeit using his core strengths (dogged determination, a boxing blue, and, yes, three word slogans) to lower the tone of Parliament, and the approach to national politics in general. In this endeavour he had many willing co-conspirators from both sides of the Chamber and beyond.

During that period one could argue that he effectively took down three Prime Ministers (Julia Gillard and Kevin Rudd – twice), no easy task. What no one recognised during what appeared to be his ‘Howitzer’ phase was that he was also drawing up the plans for his own downfall.

He wasn’t a mere draftsman; he was an architect.

He demonstrated how to exploit a broken promise with a zeal unlikely seen anywhere outside a relationship on the rocks. It would be almost impossible to calculate the number of times a high-vis Abbott reminded us about the carbon tax that should never have been.

He was a pathfinder, illuminating the way for future Oppositions.

That’s what makes the Budget of 2014 so mystifying.

A litany of broken promises that drained the pool of credibility, which had been partially filled during the long years he had led the Opposition (granted, it was not terribly deep).

Compounded by the perception that it was highly inequitable, that Budget triggered a response from our collective reptilian brain that fairness was still an Australian trait. Assault fairness – insult the nation.

The sales job was carried out via the echo chamber. Yell an idea in; hear a slogan echoed back. It worked, but only on those doing the yelling. No one had considered informing the electorate of the need for action, let alone contemplating taking it along for the ride.

The appalling politics and communication of Budget 2014 made our former PM (and his fledgling government) an easy target; transforming him from a man of whom the nation was wary but willing to give a go; to another promise-breaking, untrustworthy, administratively inept leader.

Tony Abbott had morphed into what he had previously destroyed.

It is this aspect that generates an increased level of empathy in me for how Mr Abbott must be feeling today. The galling knowledge that in attempting to emulate one of his political heroes, that he had executed his plan so poorly he found himself at the trailhead of destruction. Ironically, he was the cartographer responsible for the map that identified his position so precisely.

It is impossible to gloss over the fact that every time he managed to give his hunters the slip, he, or one of his coterie would send up a flare alerting them to his whereabouts. From Sir Philip, to Bronwyn, to Peter Dutton’s trés hilarious joke – he was Canberra’s Tantalus, almost reaching his goal but not quite being able to reach it.

I hope that history remembers former Prime Minister Abbott with more than just a PutYourOnionsOut hash tag. He deserves better than that.

I also hope that the team of Malcolm Turnbull and Julie Bishop go forward to deliver on their commitment of communicating with the nation, as opposed to treating us as mere tax-paying minions. After all, their decisions will likely have fairly substantial impacts on the lives of us tax-paying minions.

Finally, there’s a chance that the tenor of our national debate will improve and that we will witness some non-poll/focus group driven leadership and policy development.

Who knows, good government might have even started yesterday.

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Danger Zone in Food Crisis Management

By Rob Masters

In an ironic twist, the theme of Australian Food Safety Week of late last year – The Danger Zone – could not have been more applicable in the last three months throughout Australia.

To name but a few, there have been –

  • salmonella outbreaks in Brisbane affecting more than 200 people;
  • a $25 million settlement offer by soy milk company Bonsoy to 500 victims food poisoning (perhaps the largest settlement for a food poisoning case in Australian legal history);
  • Woolworths supermarket on the Gold Coast being named as the source of a dead mouse in a rice paper roll;
  • approximately 200 Australian cruise ship passengers bound for New Zealand restricted to their cabins after exhibiting severe food poisoning symptoms; and
  • the recall on of Nanna’s frozen mixed berries and Creative Gourmet mixed berries from the supermarket shelves following notification of Hepatitis A cases in Victoria and New South Wales.

Each year an estimated 5.4 million Australians are affected by food poisoning.

Preparedness for the management of such crises should be a high priority for anyone in the food industry. The visibility an issue can give to a company often leads to its future viability and credibility.

Unfortunately, the investment in preparedness is still neglected today. The adage “fail to prepare, prepare to fail” is typical of many companies. They pay lip service to having a crisis plan, having it tested and having it maintained for currency.

Yet in today’s multi-mediia environment, a single tweet can turn an issue into a full-blown crisis of global proportions.

The Nanna case is a typical example. It has brought into focus the quality standards of the berry industry of China and Chile (the source of Nanna’s products) along with that of the packaging processes of China.

The Australian Made campaign called for the purchase of “genuinely Aussie products”, and sectors of the horticultural industry called for greater quality controls on imported foods.

The issue also put further focus on “quality control testing” and the timeliness of activating recalls for “public safety and confidence”.

The issue here has its foundations with leading Melbourne radio commentator Neil Mitchell with his often asked question: “How long did you know about the issue before you activated the recall?”

This is a tipping point for all food related industries in a crisis.

The testing for contamination can take days or weeks, which makes the decision to recall very difficult.

Do you sit and wait for verifiable evidence, or do you do ‘the right thing’ by the community and recall; hoping you have enough crisis management skills and plans in place and ‘reputation goodwill in the bank’ to see you through.

No mater what, you are in ‘the danger zone’. (And the actual ‘danger zone’ for food where bacteria thrives is between 5C and 60C).