Why Companies Need To Develop Their Community Capital

 
St. Michael's Hospital.

While friends can be a great asset, their value in business has all but disappeared in the laissez-faire leadership of the past 30 years. However, that value is now emerging as the premier tool in creating competitive brands.

Friends are people who want to help your brand because they recognize its social value. Friends lower your customer-acquisition costs and your cost-to-hire ratio, and they help build community capital when you have none.

Community capital pays interest on investments of community goodwill. It works both to enhance your company's reputation and to buffer against moments of wavering public perception. Community capital is determined by the number of positive interactions your company receives with consumers, employees, the news media and government. Community capital is the competitive tool of the emerging decade. Why? Because there is a dearth of trust.

Many business leaders have forgotten, or choose to ignore, the importance of trust, always an essential ingredient in commerce. If business success is to be measured in long-term achievement, in staying power, in a company's becoming a cultural institution, trust is essential.

And that is where friends come in. In today's knowledge economy — which is driven by trust — you need friends. You need friends to talk about your organization, because when you talk about it, no one will believe what you say: it's too self serving. Consumers now control the message about your company, and you had better create friends among those consumers if you want to build trust.

I was so curious about how friends contribute to a brand and build community capital that my colleagues and I created an academic study and I asked some friends to help me.

Paul Burns, vice-president of the Canadian Gaming Association, is a friend from my political days. He was the first person I asked. Burns has a very good sense of what is going on in the economy both politically and socially. He understands community capital. He helped me develop the theme of the study: Healthy City. The study site is St. Michael's Hospital in Toronto. The goal is to demonstrate that a healthy community infrastructure is beneficial to a corporation's bottom line, that it builds community capital and creates social change.

Why St. Michael's? Because, as I am learning as a consultant there, they are the leader in inner-city health research, examining the elements that nurture or hinder optimum human development and well-being. St. Mike's Inner City Health Research program focuses on people who need help. Almost no company in North America helps the urban poor. As academics, we found this interesting, and wanted to study what happens when people help those in the inner city that have no champion.

David Butters, chief executive officer of the Association of Power Producers and a former client, was next to sign on. Butters was a huge help as he has a blue-ribbon pedigree in public relations and his knowledge of capacity-building drew him to the study. He offered his support in the first 20 minutes of our conversation. Butters suggested we generate positive monthly PR with government, consumers and not-for-profits for the corporations investing in the study and compare their return on investment with that of similar organizations that are not using the tool we are testing.

Ralph Lean my talented lawyer mentor from Cassels Brock, agreed immediately to help us choose companies to approach and offered advice on what might be valuable for corporations today and how we should measure success. The study will demonstrate how a corporation's sponsorship of the Healthy City Study affects the lives of those involved in the study. We will use an effective social-media system to communicate the change resulting from the corporations' sponsorship of the study.

Last, but certainly not least, was my friend and mentor, Tim Gilbert, partner and founder of Toronto law firm Gilbert's LLP. Gilbert's greatest strength is big-picture strategic thinking. He reminded me to focus on what I already know and to measure the social value of the corporations' work.

Our research questions became:

When a corporation sponsors the Healthy City Study, what change is effected in the community over the course of one year and over the course of two years?

How does social media, driven by the recipient, play a role in communicating this change?

How does this investment in change compare with the competition's community investments in regard to positive government relations, public relations and corporate social responsibility media coverage?

Burns, Butters, Lean and Gilbert are not laissez-faire leaders: They are the leaders of the new millennium. They are leaders that are helping us test not the value of giving but the value of social change.

Thanks to Mary Donohue / National Post