Apple and the "Little Dutch Boy" Strategy
Apple is the latest company to execute what I like to call the "Little Dutch Boy" approach to CSR strategy. The apocryphal Dutch legend tells of a boy who, upon seeing a trickle of sea water coming through a hole in a dyke, pokes his finger in to stem the flow.
Many companies have taken a similar approach to CSR. Instead of acknowledging the rising tide of social expectations on the other side of their corporate PR bulwark, executives respond reactively to each individual activist or community complaint. Apple is the latest example of this. The story begins in 2006 and continues to this day.
Accustomed to being perceived as the forward-thinking company that could do no wrong, Apple was blindsided by a 2006 Greenpeace sustainability ranking that placed it near the bottom of computer manufacturers in terms of environmental performance. The response from Apple was defensive and ham-handed with executives calling Greenpeace's work "bullshit." However, in 2007 Steve Jobs belatedly poked his finger in the dyke by posting an "open letter" laying out the case that Apple wasn't an eco-laggard.
Fast forward to 2009 and the news that a Foxconn worker in Shenzhen China committed suicide after losing an iPhone4 prototype. The harbinger was ignored and 14 additional suicides followed in 2010. Then came an 86-page university report documenting the conditions in Foxconn factories as inhumane and abusive. After sustained pressure, Apple was again compelled to stick a finger in the dyke and commission a study by the Fair Labor Association that this year confirmed abuses. Last month, an agreement was announced between Apple and Foxconn to improve working conditions.
Now Apple has been challenged on the environmental-friendliness of its cloud. Last month Greenpeace published a report entitled "How Clean Is Your Cloud" and singled out Apple for having some of the dirtiest cloud computing data centers. Unfortunately for Apple, it apparently had the chance to plug this leak before it sprung. The company claims to have data that could show the environmental performance of their cloud is better than Greenpeace estimates. But for whatever reason, Apple failed to stem the bad publicity.
With so many holes in its CSR dyke, Apple is running out of fingers. The only solution now is to admit that the leaks are caused by a tidal wave of social expectations about corporate responsibility, not one-off anomalies. Apple needs to get serious and commit to a comprehensive CSR strategy. For a number of reasons Apple has been able to avoid this step up until now.
Apple has benefited from a Teflon reputation fostered by the public's love of its products, its iconoclastic brand promise and its charismatic leader, Steve Jobs. But while reputations have inertia, like Wile E. Coyote they can't defy gravity forever.
Apple's success means it is now the biggest kid on the block. Having displaced Exxon, Apple can no longer claim to be the "Think Different" David battling the Goliath of Microsoft. In fact, for many people Apple has become Microsoft, a quasi-monopolistic behemoth. As that perception takes hold, activist and competitive complaints against Apple's impacts will begin to stick in the public's mind.
With the passing of Steve Jobs, Apple has lost its Chief Reputation Officer and its most eloquent spokesperson. Jobs was able to plug the company's reputational holes single-handedly. But as many other companies have found, the Little Dutch Boy approach to social responsibility can't hold back the rising tide anymore. Instead, Apple needs to get out there and show that they are not only innovating to serve their customers, but that they are innovating to serve society and the planet as well.
Many companies have taken a similar approach to CSR. Instead of acknowledging the rising tide of social expectations on the other side of their corporate PR bulwark, executives respond reactively to each individual activist or community complaint. Apple is the latest example of this. The story begins in 2006 and continues to this day.
Accustomed to being perceived as the forward-thinking company that could do no wrong, Apple was blindsided by a 2006 Greenpeace sustainability ranking that placed it near the bottom of computer manufacturers in terms of environmental performance. The response from Apple was defensive and ham-handed with executives calling Greenpeace's work "bullshit." However, in 2007 Steve Jobs belatedly poked his finger in the dyke by posting an "open letter" laying out the case that Apple wasn't an eco-laggard.
Fast forward to 2009 and the news that a Foxconn worker in Shenzhen China committed suicide after losing an iPhone4 prototype. The harbinger was ignored and 14 additional suicides followed in 2010. Then came an 86-page university report documenting the conditions in Foxconn factories as inhumane and abusive. After sustained pressure, Apple was again compelled to stick a finger in the dyke and commission a study by the Fair Labor Association that this year confirmed abuses. Last month, an agreement was announced between Apple and Foxconn to improve working conditions.
Now Apple has been challenged on the environmental-friendliness of its cloud. Last month Greenpeace published a report entitled "How Clean Is Your Cloud" and singled out Apple for having some of the dirtiest cloud computing data centers. Unfortunately for Apple, it apparently had the chance to plug this leak before it sprung. The company claims to have data that could show the environmental performance of their cloud is better than Greenpeace estimates. But for whatever reason, Apple failed to stem the bad publicity.
With so many holes in its CSR dyke, Apple is running out of fingers. The only solution now is to admit that the leaks are caused by a tidal wave of social expectations about corporate responsibility, not one-off anomalies. Apple needs to get serious and commit to a comprehensive CSR strategy. For a number of reasons Apple has been able to avoid this step up until now.
Apple has benefited from a Teflon reputation fostered by the public's love of its products, its iconoclastic brand promise and its charismatic leader, Steve Jobs. But while reputations have inertia, like Wile E. Coyote they can't defy gravity forever.
Apple's success means it is now the biggest kid on the block. Having displaced Exxon, Apple can no longer claim to be the "Think Different" David battling the Goliath of Microsoft. In fact, for many people Apple has become Microsoft, a quasi-monopolistic behemoth. As that perception takes hold, activist and competitive complaints against Apple's impacts will begin to stick in the public's mind.
With the passing of Steve Jobs, Apple has lost its Chief Reputation Officer and its most eloquent spokesperson. Jobs was able to plug the company's reputational holes single-handedly. But as many other companies have found, the Little Dutch Boy approach to social responsibility can't hold back the rising tide anymore. Instead, Apple needs to get out there and show that they are not only innovating to serve their customers, but that they are innovating to serve society and the planet as well.
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