Strengths Worth Coveting

February 7, 2008

Nongovernmental organizations have four strengths that corporations would be well served to heed. They are legitimacy, awareness of social forces, distinct networks, and specialized technical expertise. The public bestows the first,and the second is a function of the NGOs’ mission. The latter two refer to competences that NGOs have developed by venturing where corporations usually don’t go.

Legitimacy. According to a poll conducted by the Edelman public relations firm, both Americans and Europeans said they found NGO spokespeople more credible than either a company’s CEO or PR representative. Some fraction of the public, especially in Europe, sees NGOs as dedicated first and foremost to serving an aspect of the general social welfare. While many companies produce direct benefits to society–those in the pharmaceutical and food industries being obvious examples–the public interprets those benefits as by-products of the companies’ profit motive rather than as the direct result of their desire to feed or care for their fellow human beings.

Suspicion of companies’ motives can become so entrenched that the soundest solutions aren’t given a fair hearing. The fate of Shell Oil’s Brent Spar storage and tanker offloading system is one such example. After conducting a thorough analysis of what to do with the platform, Shell concluded that towing it into the deep water of the North Atlantic and then sinking it was the best alternative from an environmental standpoint. (It would also be £40 million cheaper than dismantling the platform on land.) Outraged by the plan, Greenpeace organized a boycott of Shell products in the UK and sent protesters to occupy the facility. Ultimately, Shell succumbed to public pressure and hauled the rig ashore for dismantling.Greenpeace subsequently admitted that it had overstated the amount of oil residues in the tank and thus the harmful environmental effects of scuttling.

Awareness of Social Forces. Companies live and die by the markets they compete in; NGOs, by the ebb and flow of people’s concerns about the safety and fairness of conditions worldwide. Although the gulf between the two arenas is large, businesses can learn much from NGOs’ attunement to and influence on shifts in common beliefs and mores that in turn shape consumer demand. For example, in the early 1970s, years before organizations such as People for the Ethical Treatment of Animals were organizing boycotts of fur apparel, and guerrillas from the Animal Liberation Front were infiltrating mink farms to free the animals caged there, groups such as Animal Rights International had highlighted industrial conditions afflicting animals generally. If fur, cosmetics, poultry, and fast-food companies had noted the public’s first stirrings of humane concern, they could have modified their practices and avoided the ensuing bad publicity and economic harm.

Distinct Networks. Most companies’ networks primarily consist of organizations that would belong among Michael Porter’s five forces model of buyers, suppliers, rival firms,new entrants, and substitute producers. NGOs’ networks, by contrast, mostly consist of other NGOs, as well as donors, regulators, legislators, and public-interest lobbyists. These networks are often quite extensive and dense, since many NGOs are small, lack resources, and must form coalitions to be effective.Partnering with NGOs is an excellent way to gain access to the information circulating within their networks.

Specialized Technical Expertise. NGO members are often thought of as young, unsophisticated malcontents. In reality, the more established NGOs are filled with lawyers, policy analysts, and scientists. Half the employees of the largest, most influential environmental NGOs have master’s or law degrees, and 10% to 20% have doctorates. Many of them possess knowledge that the companies being targeted lack. The NGOs may know about a new technology that is superior only in its environmental impact and therefore escaped businesses’ attention. Or they may have noticed a judicial ruling in an out-of-the-way jurisdiction that may one day set a standard of conduct nationwide. Out of fear that their own research into ways of mitigating harm might establish liability, companies are sometimes willfully ignorant of developments that NGOs are aggressively pursuing.