- Dan EdelmanFounder and Chairman
- Richard EdelmanPresident and CEO
Every year, our annual Trust Barometer provides us new insights into the state of trust around the world. 2012 was no exception, suggesting a sharp decrease in trust in government will give business the opportunity to step in and reimagine and reignite its role in society.
Historically, the objective of business has been to earn a “license to operate,” the freedom to pursue traditional goals of innovation, marketing products and generating profit. Then, in 2008, business failed at self-governance. Now license to operate is no longer enough.
In response, an alternative business model known as “shared value” is emerging that can help business recalibrate its relationship with society. Introducing the concept in a 2011 Harvard Business Review essay, professor Michael Porter wrote, “Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging.”
Today, business must move beyond license to operate to a “license to lead.” By that we mean business must gain the informed consent of constituents, provide value beyond its traditional performance objectives, and be held accountable through a new level of transparency. License to lead is, in fact, the opportunity to regain trust – but this time, that trust is subject to verification.
Reinforcing this belief are the 2012 Trust Barometer’s findings that the factors responsible for shaping future trust in business are more societally than operationally focused. Listening to customer needs, treating employees well, placing customers ahead of profits, and having ethical, environmental and community-oriented business practices are all considered more important than delivering consistent financial returns – and indicate that the path forward entails continuing to do the basics well while also adopting shared values. At Edelman, we adopted “citizenship” as a corporate value this year – a reflection of our own commitment to advancing the values we share with the communities in which we live and work.
We also introduced a new global practice, Business + Social Purpose, which provides comprehensive business and social solutions to maximize clients’ commercial success and social impact. As practice leader Carol Cone has said, “Business can no longer stand on the sidelines of our collective future. Bringing social and environmental issues into business in a relevant and authentic manner adds energy and a reason for being beyond profits.”
This report on Edelman’s own efforts to bring social and environmental issues into business is our way of not only participating in, but leading the dialogue on this issue in the public relations industry. Edelman has made significant progress, and we would be remiss if we did not acknowledge John Edelman, managing director, global engagement and corporate responsibility. His vision for what is not only doable but possible has begun to transform the company, and we are all better for it.