For decades, corporate social responsibility has been managed by most CEOs as a Pubic Relations activity, financed through philanthropy and Marketing Department budgets, rather than as a core principle guiding decision-making. What a loss to companies, consumers, the environment and communities. Those few companies who were early adopters of sustainability as a business practice versus messaging opportunity gained attractive financial and market position advantages. Fortunately, “The times, they are a changing.” A recent Accenture-UN Global Compact report states that sustainability is moving from the sidelines into senior leadership team meetings where sustainability issues will influence corporate decisions on capabilities, processes, systems, in fact the entire supply chain. “According to the survey, A New Era of Sustainability – UN Global Compact-Accenture CEO Study, 2010, the global economic downturn did little to dampen corporate commitment to sustainability, in fact it seems to have done the…
DELL and The Emperor’s Clothing
I’d never have bet that the US Security and Exchange Commission, the team fooled needlessly by Ponzi-scheme artist Madoff and others, would become the brave kid in the crowd to scream, “The Emperor is naked!” In accusing Dell and its CEO of negligence-based fraud, the reality of Dell’s broken business model becomes clear to all. Apparently Dell’s profits were significantly enhanced by rebates from Intel, so much so that Dell would have otherwise reported a loss in at least one year. Investors should have been told about the role of rebates in Dell’s financial performance. The information reveals much about the financial risks Dell faced. The information also casts a spot light on a poorly-conceived business model that left Dell’s products competing as commodities. I’ve criticized Dell before. Owner/leader Michael Dell failed to evolve a once-unique business model in ways that retained a…
Borders Books Needs More than Branding
Borders Group, the struggling bookseller, has a new Chairman of the Board, Bennett LeBow. LeBow’s a member of Vector Group Ltd., the investor group that recently acquired 15% of Borders (35% if warrants are exercised). According to interim Borders CEO Mike Edwards, LeBow “will play an extremely important role in helping us redefine the Borders brand.” Will a new brand image change the landscape? Perhaps on the margin, but Borders needs more than marginal change. Borders needs a new business model not just a new brand. Otherwise, change will consist solely of the smoke and mirrors of advertising rather than the real transformation required to win a profitable share of the market. As a Borders lover, I’d hate to see LeBow follow in the footsteps of other leaders who foolishly and tragically banked their hopes on a new brand alone. Let’s face it….