Like an addict aspiring to abstinence, organizations aspire to authenticity. However sincere the aspirations, the goals are elusive, and organizations lapse into inauthenticity as easily as addicts reach for their next fix.
Building on its earlier coverage of the struggle for authenticity (see here and here), The Economist just made another contribution to the growing literature on the subject: In Authenticity in the Age of Trump (EIU, November 17, 2016). Jeff Pundyk eloquently characterizes the challenge:
Our aspirations are actually transactional. We want to sell people stuff. Authenticity is often more of a tactic than a value. We know this by looking at how we measure success – return on investment. (What kind of real-life friendships do you ROI?) We know this by our desperate embrace of data and technology in the name of something we call personalization, a weak and transparent substitute for insight. As George Burns said, “Sincerity – if you can fake that, you’ve got it made.”
Pundyk points to the shift from “advertising” to “content” as the beginning of the way forward.
Start by listening more. Our industry has spent the last few years transitioning from that thing we call “advertising” to that other thing we call “content.” While it often may be hard to tell the difference between the two, the direction is correct. It’s a movement away from boasting to one of trying to be more of a thought partner, a helper. Let’s put more clarity and transparency around that movement. Let’s be more deliberate in making the transition to putting the customer’s needs above our own. And let’s recognize our prescribed place in their lives.
This is good advice, but it’s incomplete. “Listening” can easily turn into a charade, if not a farce, and “content” can be as inauthentic and disconnected from market needs as the worst of advertising. The path to a culture of authenticity requires bigger vision, not confined to how companies “listen” and communicate.
I wrote in a recent blog post that, as all other systemic threats and vulnerabilities, the crisis of trust raises two fundamental questions: What should organizations do in response, and what should they stop doing?
They shouldn’t treat authenticity as an end in itself, although they should certainly encourage and enable their leaders to cultivate self-awareness and emotional intelligence. With these qualities, organizations are probably more likely to establish governance, accounting and sustainability standards that equitably reward all stakeholders. That’s the way to restore trust. That’s the essential element. Not more focus groups, or content, or social media.
Without sound governance standards, trust will remain as elusive as triumph over addiction, and relationships with stakeholders will continue become more transactional and automated.
Importantly, a growing body of research strongly suggests that improved corporate governance also improves fundamental performance. Further, with the ongoing generational transfer of wealth to Millennials, governance, along with environmental and social factors, will feature prominently in the investment criteria of mainstream institutional portfolio managers.
The first step toward improved governance is an audit that integrates independent ESG ratings with data from no-bullshit surveys of current, former and prospective investors. At the most basic level, these audits benchmark expectations more inclusively, and they set provide a roadmap toward a sustainable alignment of internal standards and stakeholder expectations.