Seeing Opportunity in Reputation Risk

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Whatever the cause of a reputational hit, boards are liable to be held accountable and can mitigate their own reputation risk by diligently asking the right questions about the company’s ESG and CR strategies, practices, risk management, crisis preparedness, and the potential reputation-enhancement opportunities embedded in successfully managing such risks.

My new article appeared in the April edition of the National Association of Corporate Director’s Directorship Magazine.  It was co-written with friend and colleague Dr. Andrea Bonime-Blanc.  Andrea is CEO of GEC Risk Advisory, a global strategic governance, resilience, and risk advisory firm, and former chief risk, ethics, and legal officer for several global companies.

To read the full article, click here. 

http://www.jeffhoffmanassociates.com/Images/NACD_Drctrshp_MarApr17_InPrctc_ReputationRiskHoffmanBonime_Blanc.pdf

 

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Two Companies Collaborate around Shared Desired Outcome to Build the Workforce of Tomorrow

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collaboration-iconFirst published on The Conference Board Giving Thoughts Blog on November 30, 2016

We often talk cross-sector collaboration, but we don’t often hear about companies working together to solve a social problem. CH2M and Dow are doing just that. Interestingly, they count each other as both customers and suppliers—strategic business partners. Together they partnered with the Smithsonian Science Education Center to create the Dow-CH2M Smithsonian Teacher Scholar Program.

As part of the program, Dow and CH2M identified teachers from strategic locations in which the companies have a strong presence—for example, California, Louisiana, Michigan, Pennsylvania and Texas. These teachers attended Smithsonian Science Education Academies for Teachers (SSEATs), week-long academies designed to heighten STEM teachers’ ability to inspire and enlighten their students. The teachers then took their experiences back to their classrooms. They continued their professional growth through peer networking, mentoring and interaction with Dow and CH2M employee volunteers.

“I loved participating in the class because it gave me an opportunity to see and hear real research and find ways to emulate that in my classroom,” says Gordon Culver, high school teacher, Frankenmuth High School, Michigan. “It was also exciting to have a direct connection between real-world research and the things that can happen with my students.”

Both companies support efforts around building the workforce of tomorrow and environmental sustainability. The teachers were divided into three cohorts with each focusing on one of the following elements: Biodiversity, Energy’s Innovations and Implications, or Earth’s History and Global Change. This program is an example of the companies utilizing their core competencies along with philanthropic dollars and intellectual capital through their employee volunteer programs.

“At a time in corporate giving when so many social issues are pressing around the world, it is even more critical to collaborate with other funders with whom you share similar values and interests,” said Ellen Sandberg, executive director, CH2M Foundation. “The multiplier effect comes into full force, thus leading to even greater impact. Partnering with Dow has meant greater engagement between the two companies than ever before, benefiting both the community and the business relationship.”

“We realize that in order to tackle the challenge of building the STEM workforce of tomorrow, one company cannot do it alone,” said Meredith Morris, global STEM leader, the Dow Chemical Company. “We were extremely proud to expand our collaboration with the Smithsonian Science Education Center to include our key business partner, CH2M. It is exciting that we are able to combine our aligned global citizenship and sustainability strategies and engage the passion and skills of our employees to collaborate on a program that will empower educators in communities that are important to us.”

Initial feedback from the program is positive and shows that it has sparked enthusiasm in the teachers and subsequently benefited their students. “I think it has made an immense impact on my teaching strategies,” said April Languirand, fifth grade teacher, Lakewood Elementary, Louisiana. “I have a degree in history and am a huge history nerd. Science has never been my passion, until now! The program piqued my interest in science like never before. It also made me think about why I didn’t like science as a student. I have put a lot more effort into making lessons fun for my students—being excited about the lesson and then passing that excitement on to my students.”

Rhonda Wendel, fifth grade science and social studies teacher, Danbury Elementary, Texas, said: “I have shared with my students that there are so many choices of careers in science that I didn’t even know existed. The careers that the experts discussed opened up a whole new world for me to share with my students.”

The desired outcome if the Dow-CH2M Smithsonian Teacher Scholar Program is to build the workforce of tomorrow and the anecdotal feedback received so far certainly points to long-term success!

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“Abundance & Disruption during an Exponential Era”

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wp_20161116_10_13_10_rich-2Peter Diamandis is one smart, forward thinking and amazing guy.  He is an international pioneer in the fields of innovation, incentive competitions and commercial space. In 2014 he was named one of “The World’s 50 Greatest Leaders” – by Fortune Magazine. He is best known as the founder of the X Prize.

I had the honor of meeting him and hearing him speak last week at “Governing in a time of Seismic Change,” the 2016 Corporate Director Symposium jointly convened by the USC Marshall School and the National Association of Corporate Directors. The topic of his keynote was “Abundance & Disruption during an Exponential Era.”  This could not be more appropriate with the quantum change we see happening all around us.  Diamandis is the New York Times Bestselling author of Abundance – The Future Is Better Than You Think and BOLD – How to go Big, Create Wealth & Impact the World.

“A culture of innovation comes from people who are never satisfied. What’s next?.”  “Does your organization celebrate failure to go 10x bigger?” “Exponential growth opportunities are driving massive risk taking.”  His talk focused on making big bets, taking huge risks, pointing to the stars and don’t look back.  He talked the barriers that companies have to success.  So many are risk adverse and their people are not celebrated when they fail, their often fired.  To get that ‘moonshot” you must try over and over, harder and harder, until you figure it out.  Too many take the path of least resistance.  These companies will fail. “The only constant is change, and the rate of change is increasing. 40% of today’s Fortune 500 companies are predicted to disappear in the next 10 years. Competition is no longer the multinational overseas; instead, it’s the exponential entrepreneur creating companies like Uber, Airbnb, DropBox, Oculus, Whatsapp, SpaceX and Tesla.  Disruption is also coming from data-driven tech giants who are entering into adjacent fields: Google into the automotive industry, Apple into the music industry, Facebook into the global telecom industry, and IBM Watson into healthcare.”  “Today a company’s success depends on mindset, its use of exponential technologies and the power of crowdsourcing. Where should a company be looking to grow 10x bigger, rather than 10-percent bigger? What does it take for a company to become an Exponential Organization? How do you become Uber rather than Kodak?

Hearing Peter challenge this group was energizing.  There is so much opportunity if we will let it happen.  Are we on an exponential trajectory or are we blinded in the success measures of the past?

http://www.diamandis.com/

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Lessons from a Top Gun pilot: Risk and Opportunity

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wp_20160915_13_59_44_pro-2Green Hasson and Janks hosted their third nonprofit conference in Los Angeles.  The theme this year focused on their recent report on Nonprofit Risk: Opportunities and Challenges in a High-Risk World.  The keynote speaker was Art de la Cruz, COO of Team Rubicon.  “Team Rubicon unites the skills and experiences of military veterans with first responders to rapidly deploy emergency response teams.”  They are one of my favorite veteran’s organizations.

Art spoke primarily about Risk and Opportunity.  “Risk tolerance is beyond managing risk but looking for opportunity.”  Through his career he has used a Risk and Opportunity Matrix as it helps people think about what is and isn’t in their control. It’s about how you maneuver around the grid.  This is how he looked at managing risk while in the military.  “The other option is to do nothing.  If you don’t plan on seizing opportunity, you will be in a challenging situation in the future.  It’s like car maintenance, its driving fine now, but if you never change the oil, you will eventually stall.”

He was a lieutenant when he retired after 22 years in the military and was a “Top Gun” pilot.  On September 11, 2001, he was on the aircraft carrier USS Enterprise.  When the first tower was hit, email was shut down, when the second tower was hit, they stopped dead in the water.  They then waited for instructions from the President.  He used this as an example of an organization, you are cruising along just fine, but then an external force, or in today’s language a disruption, occurs, you change course. Even if you are changing the direction of something as massive as an aircraft carrier.

He talked of the importance of cognitive diversity.  “Bring in different types of experience, and the collective experiences, to the table when making decisions.  You can’t manage risk to zero.  Determine risk tolerance.  Jump through methodical hoops to better achieve mission. And when ideas arise, listen for value, don’t listen for barriers.  Find the five words that are really, really good, versus looking for the five words that make the idea a challenge.  When looking five years out, are we just going to focus on mitigating risk or are we going to seize opportunity?”

Taking risks is hard.  Often it is going against people’s comfort level.  Sometimes following popular belief is the easiest route, but does it really lead to new ideas and moving society forward?  Art gave a lot of good examples and the new report from Green Hasson and Janks is worth the read even for those outside the nonprofit audience for which it was written.  When it comes to taking risks, and being bold, here is one of my favorites quotes, from Henry Ford: “If I had asked people what they wanted, they would have said faster horses.”

www.teamrubiconusa.org/

www.greenhassonjanks.com

 

 

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How CSR Magic Helped Make Shanghai Disney Resort Possible

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Shanghai CastleToday Shanghai Disney Resort opens to the world. From afar, the $5.5 billion project looks spectacular and I congratulate all of my friends and colleagues who have worked to make this a reality.  It’s been a 15 plus year journey, and while I have been gone from Disney for a while, I was involved with setting the stage. Corporate Social Responsibility (CSR) was part of the mix from the beginning.  I was fortunate to be part of the team looking at what The Walt Disney Company was going to be in China.  Moving from years of a licensing model to one where Disney actually had a presence and operated within the country.

My role was to establish the corporate citizenship strategy and function within China.  Being a Communist country, unlike in other parts of the world I’ve worked, government interest is central to the strategy.  Melding their interests with Disney’s outreach focus of helping children in need, was a delicate dance.  Helping children with severe medical conditions is fine, helping poor children can be problematic as it could be viewed as spotlighting a deficiency on the part of the government.

China was exciting.  Disney opened an office in Shanghai adjacent to the French Concession.  On my visits, the walks between my hotel and the office were filled with sights and smells very different from what we are accustomed to, even for a large cosmopolitan city.  I would eat Chinese food three meals a day and loved it.  Primarily, I worked with the government relations team as we met with government officials and nonprofits/NGO representatives.  NGO stands for Non-Governmental Organization, in China, many are run by the government so we call them GONGOs… Government Operated Non-Governmental Organizations (oxymoron?).   One of these GONGOs was the Children’s Palace.  Very similar to a Boys & Girls Club in the United States.

One of the early initiatives in China was to bring a traveling company of “The Lion King” to Shanghai.  We organized a Children’s Palace trip to see the show followed by a special educational presentation by the cast.  Disney VoluntEARS escorted the children.  It was the first Disney VoluntEARS project for the new office.  We also established a relationship with Shanghai Children’s Medical Center.  Disney designed and installed a playroom in the hospital complete with play area, reading area and fun character murals on the walls. Disney VoluntEARS regularly read to patients in the playroom along with visits from Mickey, Minnie and friends.

WP_20160613_14_55_22_Rich (2)Building on this, last week The Walt Disney Company announced an RMB 20 Million ($3.1 million) to create more than 50 of these rooms in hospitals across China.   When the Sichuan Province Earthquake occurred, Disney donated $1 million to help rebuild destroyed schools.  The company also donated books and toys.  Disney VoluntEARS took the train to the region and actually helped with the rebuilding.  Plus, through the Disney Wildlife Conservation Fund, a donation was made to help with the damage at the Chengdu Research Base of Giant Panda Breeding.  Actively demonstrating that Disney is a good corporate citizen and showing examples of what the Chinese people could expect as the company’s presence grows, was a strong consideration with the early strategy.

Back to the potential Shanghai theme park, I spent a good portion of a day touring what is now the 1,000-acre project in Pudong.  While the government was responsible for the land acquisition and re-settling the farmers and other residents, it was important for the company to ensure that it was done in a fair and equitable manner; looking at near and long term effects on jobs, families, education and overall wellbeing, as well as addressing any environmental issues related to the site.  In addition to being the right thing to do, reputational risk was a major consideration.  Earlier I had a similar role with Hong Kong and then specifically advising Hong Kong Disneyland, but with Hong Kong I was involved when the current site was still under water, before the land fill, all the way through construction, opening and on-going operations.

Once the Shanghai Resort project was announced, in Burbank, both the International Business Development group and Walt Disney Imagineering started a Chinese cultural awareness and understanding program.  After criticism of the early days of Disneyland Resort Paris, the company spent much time, money and effort to make the park more culturally relevant to not only the French but to residents from the other countries in greater Europe.  Advancements were made with the Hong Kong project, but for Shanghai, the cultural relevance extends deeply into the design and storytelling.  I learned a lot from that cultural program and would have benefited from them when I first started working on China. The new resort is “Authentically Disney and Distinctly Chinese.”

From all of the conversations with those involved, the posts and articles I have read, the photos and videos I have seen, this is one amazing Park.  It is unique.  While all of the Magic Kingdoms have their own personality, this one has significant differences, and for good reason. From a “license to operate” perspective, the government was actively involved, in fact the joint venture partner, the Shanghai Shendai Group is a consortium of four state-run companies. Interestingly, the many compromises that Disney made I think challenged the company to be more creative in the design, resulting in many new attractions that would have never been created.

It has been heartwarming to see the photos of new Shanghai Disney Resort Cast Members (employees) wearing their Disney VoluntEARS shirts in local neighborhoods. The sense of community and responsibility has already taken root and is growing.  While my involvement was before the design was finished and construction began, I feel proud and honored to have played a small part in paving the way for the magnificent Enchanted Storybook Castle and its realm. It is amazing to see how CSR magic helped make Shanghai Disney Resort possible.

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The Third Wave. A book by Steve Case

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WP_20160429_18_06_18_Rich (2)A fascinating and must read book.  It clearly lays out the technology revolution by illustrating where we have been, where we are now and where we will be going in the future.  But this is more than a book on technology, it’s a book about how the world works and will work as technology plays an ever increasing role in our lives and within business, government and nonprofits.  It’s about shifts and disruptions. He lays out a future that can be exciting, or a warning call to those who are ignoring the signs of change.  The third wave will have a major impact on the economy and the way we live our lives.   I had an opportunity to see Steve and hear a lecture based on his book last month at the Reagan Presidential Library.  I finished the book this week on a flight.  There were several nuggets that I think are important to consider.

“The first wave of the Internet, which was building on-ramps to the Internet and convincing people to get connected, required partnerships. We had hundreds of them with software companies, hardware companies and media companies. The second wave, the real successful companies didn’t need partnerships. You can go through the list — Facebook, Snapchat — to get going. In the third wave, the sectors that are going to get disrupted are where partnerships with incumbent organizations like hospitals and universities are important to get significant market adoption. It’s not just about the app on your phone, third wave partnerships will be similar to the first wave. It wasn’t just about what you were doing on your own; it was how well you played with others.”

“The superstars of the Third Wave will pursue bold visions, but their true gift will be mastery of execution…    I tell them that it all comes down to the three P’s:  partnerships, policy, and perseverance.”   “A great product will only get you so far.  You typically won’t be able to build an audience by dropping your app in the App Store and waiting for users to sign up.”  This is where partners come into play.  The story won’t be the technology in its self, it’s the technology enabling those with expertise in a subject area, or an organization, helping them better deliver on their mission. Policy is an interesting one as policy tends to lag behind the forward movement of society and this is particularly the case with both new and innovative business structures as well as technology applications.  And there are conflicts, we see it on one side with privacy rights and on the other the push towards transparency.  As the internet knows no boundaries, what in some countries would be viewed as freedom of information and the right of free speech, in others it could be viewed as subversive and treason.   This is a discussion we see every day whether it be Facebook being blocked in China or the Edward Snowden leaking classified information. There is a middle ground as I think China should unlock Facebook and I don’t think Snowden should get away with leaking classified information.  There are policies protecting archaic systems that at one time made sense but now have caused unintentional consequences.   As for perseverance, “The winners of the Third Wave will be those who chase big-impact ideas with a sense of urgency – but also methodically and diplomatically… You’ll have to keep adjusting, tweaking, pivoting.”

He provides a candid look at his career, the successes and the failures.  I particularly appreciated his recounting of the AOL merger with Time Warner.  It proves something that I learned a long time ago of the importance of culture when bringing groups together.  While it looked like the perfect marriage when they got engaged, by the time they got divorced it really made you wonder what they were thinking.

Both in the book and his lecture he talked about the importance of responsibility and purpose.  And that Third Wave companies will succeed when they have a focus on profit and purpose, understanding both their positive and negative impacts on society and the environment.  Steve told of the work of The Case Foundation, run by his wife Jean, and of his company Revolution.  Impact investing whether for profit or nonprofit is central to their strategy.  Jean and I discussed this extensively during our USC Conversation last year.  https://www.youtube.com/watch?v=W4JsDziHEhQ

My favorite comment he made was “Internet enabled’ will start to sound as ludicrous as ‘electricity enabled’ as if either were notable differentiators.”  And probably most notable “The Third Wave of the internet will not be defined as the ‘internet of things,’ but it will be defined by the ‘internet of everything’.”

The world is changing so fast that many businesses and organizations will fail unless they take steps to evolve and be disrupted.  The Third Wave is an eye opening journey and a wakeup call.  In a relatively short book, Steve has raised many provocative issues that for future success should be put into action.

http://www.thridwavebook.com

 

 

 

 

 

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Restoring 1 Million Acres in the Mississippi River Basin

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REF_MissAlluvialValley_MapToday is earth day and on Wednesday I met the most interesting woman who is working to restore one million acres in the Mississippi River Basin, North America’s Amazon.  This area is the third largest water shed on earth.  It spans 31 states and two Canadian provinces.  It covers about 40% of the continental U.S.  Google Mississippi River Basin, you’ll be amazed.

PJ Marshall, and her husband Marvin, embarked on this journey in the aftermath of Hurricane Katrina.  They started the Restore the Earth Foundation based on a solid business model developed from their careers in business.  They matched private investment in a program that would have verifiable returns.  They did well and their metrics were admirable.  But then they learned that their efforts, along with others, to restore coastal wetlands, was not keeping pace with the ecological degradation.  Louisiana wetlands loose an area the size of a football field every hour.  In the Basin, 80% of forested wetlands have been degraded.  This area also contains the largest concentration of underserved communities in the U.S.   As preservation has past, and now it’s about restoration, the challenge is daunting.  Their plan, restore one million acres over the next 15 years.  Once achieved, they project that the restored wetlands will lead to a 2% reduction in total U.S. climate footprint and a 12.5% reversal of the “dead zone” in the Gulf of Mexico.

WP_20160420_17_48_32_Rich (2)While the environmental impact is both astounding and critical, it is the financial model that is truly amazing.  They do this through a revolving fund and their EcoMetrics model. It leverages public funds through private funds, turning $1 into $9 of integrated value. Benefits include recreational activities restored, jobs created both directly and indirectly, enhanced biodiversity, build intellectual capital and with financial capital including offset credits, revenue from timber and through sales of restored land.  I won’t go into the details here, but their website illustrates.

Their mission is to “restore the earth’s essential forest and wetland ecosystems, delivering outstanding environmental, social and economic returns.”  This is a plan that I think even the most skeptical of climate change can get behind.

http://www.restoretheearth.org/

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