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The Pitfalls of Ethical and Values-Based Branding

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Marketers and executives have caught on to the fact that consumers are more interested in shopping with brands that align with their personal values. However, the rise of ethics and values-based branding has major red flags that companies and consumers alike should be aware of.

 

1. Companies Becoming the New Politicians

 

Brand activism has become a popular strategy, as relevance in the political conversation has not only helped build brand profiles but also saved company reputations. For example, Nike’s choice to work with Colin Kaepernick in 2018 during the Black Lives Matter movement showed not only corporate social responsibility in racial justice but also strengthened the brand’s reputation. However, in 2020 African American workers within the company called Nike out for hypocrisy in its public messaging versus real-time company practices.

 

While it seems like Nike came out with a win, this move can easily turn into a new form of identity politics. If companies focus on using social issues merely in the form of on-brand marketing campaigns and gimmicks without implementing a company-wide overhaul in practice and employee relations, then ethical marketing campaigns and values-based branding become shallow and merely focused on what will help the company leverage advertising platforms and social media for superficial profits in the short term.

 

2. Continuing to Miss the Point of Corporate Social Responsibility

 

Corporations jumped on the CSR bandwagon when the United Nations Sustainable Development Goals were released and climate change become the major, ongoing trending topic along with human trafficking, modern slavery, and other human rights subjects. Most executives and consumers think of green initiatives and dismantling sweatshops in developing countries in relation to CSR, but CSR ultimately challenges companies to be ethical and values-based companies that are socially conscious and operate in alignment with what benefits humanity and helps to achieve the UNSDGs in a timely fashion.

 

Brands have an opportunity to shift their MOs from profits by any means necessary to supporting humanity by any means necessary. This is a time for companies to reimagine the totality of their operating procedures and business experience with the main goal of making the world a better place for its workforce and customers. COVID-19 has served as a major change agent during these times, as every company has had to shift to a public health mindset, which has evolved into a complete redesign of the customer and brand experience. All of these elements contribute to and are undergirded by corporate social responsibility. CSR now transcends paid community service by employees as done by GAP, Inc. or generic initiatives to report to shareholders and challenges companies to make sustainability and public health the central pillar of a company’s business model and innovation practices. This evolution of conscious business experience design is not to be overlooked.

 

3. Relevance Over Connection

 

A major part of brand communications for the public and private sectors is being relevant in the mainstream conversation. From marketing campaigns to general social engagement or influencer marketing, the goal of executive teams is to merely be a part of the conversation, generate page clicks, and optimize content to encourage conversion. This is a dangerous strategy because it continues to dehumanize the customer, and ultimately, brand/business experience. On December 11, The Wall Street Journal published an op-ed by a male who took exception to Dr. Jill Biden being referred to as “Dr.” in her role as First Lady of the United States without being an M.D. Not only was the internet outraged, but one of the WSJ’s subject matter experts withdrew her participation in the Diversity + Business Newsletter due to the gross judgment of the editors who decided to publish the “sexist” and “elitist” article.

 

For the sake of clicks and shock value, The Wall Street Journal lost the respect of millions of readers as well as professionals who could elevate the profile of the paper in relation to pivotal topics such as diversity.

 

If a company focuses more on being relevant or incorporating the latest shiny new object in the technical space without human context as to why the conversation or new technology matters to the end consumer, then the success of the new strategy will be short-lived. Innovation in this new world requires futuristic and long-term thinking, something often missing from corporate boardrooms seeking short-term profits to report to shareholders. This also presents a challenge to companies to paint the long term vision for shareholders, as a good investing strategy is based on long term success and viability of a company.

 

Repositioning a brand as a long-term change agent for an evolving world is key to long-term success, and long-term success will come from a genuine connection to the human condition and taking positive action for change as opposed to relevant marketing schemes that use the right keywords and strike the right superficial chords.

 

4. Failure to Read the Room

 

If a company invests in sustainable products, runs campaigns with the right celebrities, effectively capitalizes on relevant hashtags and social media trends, but still overworks and underpays staff in order to save money and increase profits, then it has effectively missed the point of ethics and values-based branding. High profile politicians like Alexandria Ocasio-Cortez have made workers’ rights not only a top public issue but also a public policy initiative that has influenced worldviews. Evolving to meet the times calls for more than requiring supply chain vendors to adhere to international laws and norms on human rights; it requires companies to invest in human capital by offering more full-time positions, competitive benefits packages, and living wages.

 

What does this mean? Companies seeking relevance and sustainability over the next ten years have to bite the bullet and invest in their employees. Imagine being a luxury retailer that only hires full-time employees at a wage rate that guarantees employees at all levels can live comfortable lifestyles that reflect the brand’s standards. Employees are no longer workers but proud brand ambassadors. A study by Harvard Business Review shows that employee satisfaction has a direct correlation to customer satisfaction as well as increased sales and improved stock performance across all sectors. A company that invests in its human capital positions itself as a change agent that lives the culture it wants customers to buy into.

 

5. Continuing to Risk National Security

 

COVID-19 exposed a significant elephant in the room that only a handful of policymakers are willing to publicly acknowledge: the private sector is America’s biggest national security risk. The profits by any means necessary business model has exploited globalization at the expense of America’s national security interests. China has mastered the art of economic warfare, and no better example of this can be shown than through the entanglement of China in the global supply chain and retail consumer base that put a damper on countries pulling out of China in response to the uncontrolled and misinformation driven spread of COVID-19, which compromised public health capabilities for every country on earth.

 

From the pandemic to the rise of Russian election interference on tech and social media platforms, the private sector and its anti-government stance have put democracies around the world at risk, especially the United States. Ethical and values-based branding has to include the security and safety of employees, consumers, and home states as a whole. It is no longer enough for the private sector to focus on adapting to the public conversation and trends for the sake of profit. Brands have to take up the mantle of being bulwarks against adversarial initiatives to compromise our nation’s infrastructure (physical, economic, and digital), to create a safe and thriving economic environment at home and abroad.

 

Final thoughts

 

Ethical and values-based branding is the future of marketing; however, companies and organizations are hard-pressed to become introspective about the totality of their business experience design and how ethical values are reflected throughout the entire business model. This calls for a perspective on brand innovation that transcends marketing and advertising and incorporates operations, supply chain, employee relations, human resources, as well as political relevance and national security. Companies would benefit from intelligence and national security departments in addition to their government relations, public affairs, and sustainability branches. These times call for a complete overhaul of the private sector and how companies understand their place in the world.