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Elsie Maio is the founder and president of Maio and Company, Inc.
She began her career on Wall Street in equities research and was a
senior editor at Institutional Investor before joining
McKinsey & Company. Inspired by the potential for disciplined
strategic communications to move business forward, she became a
senior partner at several world-class identity firms. In 1994, she
founded Maio and Company to focus on helping clients achieve hard
business results through the soft science of brand and identity
management. Her opinions appear in The Wall Street
Journal, Institutional Investor, Brandweek,
Brand Marketing and American Banker, as well as
in leading European business publications. She also provides
marketing commentary for National Public Radio's “Marketplace
Although many of the issues you champion are often lumped together
under “sustainability,” you are resistant to the term.
The term “sustainability” can be misleading. When a company talks
about its commitment to sustainability, what do they really mean?
Self-preservation? Environmental sensitivity? Or do they mean a
broad social contract with humanity? That ambiguity is confusing.
And the last thing business wants to do these days is confuse
already skeptical stakeholders. At worst, the term suggests that
“endurance” or the status quo are worthy corporate goals. But our
research points to growing pressure for a new paradigm. For the
engine of business to turn its momentum toward enhancing life on
earth in a profitable, moral manner that focuses its extraordinary
ingenuity and passion for profitable growth on inventing the next
generation of win/win solutions. Yes, “sustainability” is necessary
but it is just not enough.Why is the need for this change particularly acute
Historically, the seeds of this larger role have sprung up in the
face of tragedy and moral outrage. For instance, the Triangle
factory fire of 1911 led to new regulations that made businesses
responsible for the safety of employees. Now, with our recent
scandals, there is again a call for greater ethics in business.
What we see in our institutions is a process of decay and of
systemic breakdown. Corporations have been granted the privileges
of personhood under the law of the U.S. but they haven't been given
the responsibilities. We, as a society, are beginning to hold them
responsible. As businesses become larger parts of our lives they
are going to have to address larger questions. This is not just a
social or environmental necessity. Recent scandals have shown that
businesses that are not ethically sound are not financially stable.
Why does it seem that businesses are now more vulnerable to
Stakeholders can see the intent of the company more readily now. It
used to be that the messages of advertising or PR would dictate
impressions of a company. Today, the pattern of its actions shows
the corporation's main premise. How? The internet has empowered
consumers to observe corporate behavior much more closely.
Communities of interest now have a way to connect instantaneously
to companies and to each other, regardless of how many shares they
hold or where they are located geographically. This is a new
ability for consumers and small shareholders, who in the past may
have felt powerless to understand business, much less effect
change. Technology has made business more transparent, visible and
vulnerable. There's no place for businesses to hide.
Can you give us an example of the effects of this new
Take Monsanto. Monsanto had a visionary CEO and extraordinary
people inside managing that branding practice. They had excellent
professional design support and they had a fabulous creative team.
It was inspiring. I was impressed with what they did but the world
wasn't. Monsanto failed to take in to account how visible their
products had become and how strongly certain consumers felt about
having genetically modified organisms in the agricultural system.
As a result when they went into Europe they were shouted down time
and again. The backlash for Monsanto basically dismantled the
company. So I say that, from a creative, brand design perspective,
the brand operation was a total success, but that patient died. The
old branding process forgot key stakeholders. This was a sad
because that company's intent, I believe, was truly to provide
“food, health, and hope” to the world's populations.
How could Monsanto have prevented this reaction?
They couldn't prevent it, but they might have anticipated this
reaction and collaborated with their critics more effectively in
order to mitigate it. Corporations need to sit down with their
critics and really listen. They need to seek their critics out and
ask, “What is our shared goal? What can we do so that we can see
that we are making progress based on joint milestones?” And, as a
compliment to traditional media analysis, business needs to be
aware of the continuing chatter of the very smallest stakeholders.
Again, this is critical for financial as well as ethical reasons.
Do you think this hypersensitivity might make companies risk averse
and so dampen innovation?
The answer is it could, but it doesn't have to. The public is not
necessarily risk averse if there is a mutual goal established that
benefits both sides.Where does this leave the CEO and the tradition of the
Well, they had better be able to articulate their core values and
make sure that they permeate the entire organization. Listen, we
need strong leadership now more than ever. The role of the CEO is
still to provide the vision and empower the organization. But they
also need to describe the role of the organization in the larger
context in a manner that is respectful of every piece of the
organization as well as its social and environmental context. The
issue of how you maintain values across a large organization is
crucial. It's a big challenge that's made bigger by the fact that
it has not so far been identified as a management discipline.
Jeffrey Immelt, when he first took over GE, said that what kept him
up at night was the behavior of employees in the far-flung corners
of the earth. Now, ironically, the breach turned out to be much
closer to home. But Immelt recognized that the stability of a
business is determined by the actions of average employee going
about their daily routines a long way from headquarters. Decisions
that affect the future of the business are being made every day in
ways in which the business is least prepared for. This is why it is
so crucial that a common set of values permeate the organization so
that every employee, when faced with an ethical dilemma, knows how
to react.But haven't companies been talking about values for years?
And yet we continue to have scandals. Beginning in the '80s, it became popular for
companies to have mission statements. Unfortunately, these mission
statements were created by outsiders, often branding companies,
endorsed by a CEO and then pushed down through the organization.
But they had no connection to the spirit of the organization. Enron
had an exemplary mission statement. If you read Enron's mission
statement you would think, “Hey, this is a company that I want to
work for.” They talked values but these values did not inform the
behavior. This is pretty typical. Generally speaking, it has been
the head telling the body something and the body walking the other
way.Have branding practices contributed to the current
When I look at the branding discipline, I see a set of behaviors
and objectives that are no longer sufficient. For companies to
think that they can improve their positioning simply through
increasing communication is just making them more and more
vulnerable. BP, for example, has redefined themselves as a company
that cares about people and the environment. This repositioning has
opened up broader opportunities for them. But they have also made
themselves very vulnerable. Any prime mover is a target, especially
in what has been termed the “greater good marketplace.”
Usually what problems do businesses bring to you?
The businesses that come to us for help are usually in the process
of expansion. They are raising their profile. As they step up into
the spotlight, the leadership needs to be confident that their act
is clean. Often these companies have been driven by a single
personality or set of personalities and now need to
institutionalize their value system. In order to step up into the
spotlight, the leadership needs to have a reality check on ethical
and environmental risks and a viable plan for improving current
shortcomings. Others clients come seeking to gain a broader
strategic value from specific ethical practices. Our clients come
to recognize that the promise of their brand, no matter how
creatively scintillating, is a liability unless they deliver it in
the spirit of mutual benefit to their communities.
So how do you help business create an effective value system? It has to happen from the inside out. Really, it is
more a process of discovery than creation. The values are there.
They live in the people who work for the company. What we try to do
is to provide a voice and a framework for inputting these values
into the decision-making process. One of the first steps is a self
audit. Employees identify what their core motivating values are.
They rate each aspect of the company separately, creating a kind of
report card. We then ask the employees where they think the company
should rate. The results vary from industry to industry and from
level to level within the company. We then ask the employees what
specific evidence the employees would need to be convinced that the
company had actually improved. So, in the end, what management gets
is a detailed report card, a set of goals and a snapshot of
milestones of credibility.I can see why this approach might make for happy employees,
but is this kind of rule-by-consensus effective for generating
business value? Not only are we factoring in employee's inputs, but
strategic external stakeholders' input too. The transparency of
corporate behavior is a fact of life now. It is changing brand
management from a directive to a participatory process. And the
solutions are richer for it. The leverage for management is
potentially huge. Of course, consensus is not the only factor in
determining the direction a business should take, but it is
important. More and more I see strategists coming together around
the idea of participation and inclusiveness. Studies show that
business leaders make better decisions when they have more inputs.
This is contrary to the whole expert setup. What we're seeing in
business today is, to borrow a phrase I have been hearing a lot
lately, “the fall of the house of experts.” Decisions that come
from within are richer and more efficient than expert-driven points
We have been talking a lot about the responsibilities of business,
what about the responsibilities of shareholders and
The Dow Jones sustainability group index was started in 1999 to
track companies that manage themselves in a more balanced way. How
did they determine which businesses were balanced and sustainable?
The first cutoff was a 10-year planning horizon. Investors have
been pushing CEOs to drive up stock prices by doing what is
expedient in the short term. So how can we blame the CEOs? This is
what they are rewarded for. You can't run a sound, balanced,
responsible business quarter to quarter. You are going to win some
profit quarters and lose some. The greater good is the
responsibility of each investor and consumer. We need to look at
our own motivations and our own greed. Businesses, by and large,
are jumping through the hoops that we set.
...First published in Gain
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