Every once in a while a study comes out that makes you a little bit sadder for society… but doesn’t surprise you at all. A recent study by Duke University on corporate social responsibility does just that. The study, titled “Do Actions Speak Louder than Words?” explores the idea that sometimes symbolic gestures have a bigger impact than actions themselves.
Duke University compares actions, such as taking initiative to make your company more environmentally friendly, and symbolic gestures, such as “greenwashing” or showing support for the movement but not changing your business.
The report concludes: “We found that symbolic actions have a higher impact on market value in the presence of higher intangible assets, and that a larger gap between symbolic and substantive actions has a higher positive effect on firm performance. In addition, the more firms engage in both types of actions (i.e. the higher their interaction), the higher the value accumulating to the firm. Substantive actions, on the other hand, have a lower or no significant impact on market value (even though they have a significant positive effect on ROA* in the presence of higher intangibles).
(*ROA- return on assets)
Basically, companies that promote themselves symbolically as socially conscious are more likely to be successful than companies that take the more difficult route of actually changing their practices.
I guess marketing and PR experts could use this study to validate spending more money on promotion and design than actually following through on the values they claim to have. It’s the “story” that Seth Godin talks about.
But it’s also fair to point out that this study was done over a seven year period. The long-term results of symbolic and substantive applications could definitely be different. Usually society expects companies to follow their symbolic efforts with real actions over time. If your buying a product promoting the environment, you hope that it’s actions align with that idea.
This is where authenticity is important as well. When the activists start pointing fingers it’s better to have a solid foundation under your feet. The best kind of crisis communications takes place before the crisis even starts. No one wants to get caught in a social/political argument… (right Chick-fil-A?)