Shelley Martin is president and CEO of Nestlé Canada Inc.
There was a time when large companies were, for the most part, seen in a positive light – creating jobs, driving economies forward and helping bring together a more unified and connected world. However, in recent years, this perception has changed, and in the current environment, multinationals are facing increased scrutiny.
There is a growing perception that "to be big is bad, and to be small is good." This is being fueled by a variety of factors, including a growing anti-globalization movement, anti-corporate sentiment among millennials, increasing demands for corporate transparency (and a corresponding view that multinationals are not transparent enough) and a general interest and affinity for all things local, whether it be the 100-mile food rule, or clothing and crafts made by local designers.
Today, consumers want to connect with a company and understand its philosophy and point of view. They want to know the organization behind the brand, be aware of the social and environmental impact of the services and products they consume and expect companies to be locally relevant and engaged. If a company wants social licence to operate beyond its borders, it now needs to communicate what it stands for and, perhaps most importantly, how it's contributing in a positive way to the communities in which it operates.
To be a successful multinational, a business must meet the demands of various stakeholders, and to do so there are three considerations that it needs to address. Each is critical in helping the organization create goodwill and establish credibility in local markets; however, each cannot be done in isolation.
The first step for any multinational that seeks social licence across borders is to define and communicate a clear purpose that aligns actions and creates a common goal. It needs to ask itself: Why do we exist? The answer needs to be simple and explicit. You need to be clear about what you are doing and what you will do – through facts, examples and telling stories in a meaningful and authentic way.
At Nestlé, we have recently redefined our purpose: to enhance quality of life and contribute to a healthier future. This purpose motivates us to offer products and services that enable individuals and families to lead healthier and happy lives, develop thriving and resilient communities and champion sustainable products and consumption. Our purpose really defines who we are and why we exist.
As an organization, you then need to define the values that align with this purpose. This will ensure external and internal audiences understand how the company will behave in a country and the standards to which it will hold itself. These values "drive" your purpose and need to be tangible and authentic to your people. You also need to provide insight on how the company will live these values. Aligning globally helps create a unified organization and stronger sense of purpose, and adapting corporate values to local markets will increase their impact. Our values are based on respect – for ourselves, others, diversity and the future, and all our activities reflect this.
The third consideration is centred on local relevance. While there can only be one global purpose for a multinational, activation in regional markets needs to be done through a local filter. Regional needs must be considered and organizational flexibility must exist for tailoring programs; it's not (and cannot be) a one-size-fits-all proposition. The company must actively engage the local community and its audiences to listen, learn and adapt. If this does not happen, then the organization risks being seen as tone-deaf and loses relevance and credibility.
For example, we have a global Youth Initiative to help young people gain employment, but the partners we have and the way we execute is tailored to the Canadian work force. Global commitment but local execution. I believe that you can – and must – be both global and local, and in fact, this offers Canadians the best of both worlds There's no question that multinationals are dealing with an increasingly cynical consumer mindset. That's the reality we face. It's incumbent on us, if we want to continue to operate in local markets, to earn trust. A well-run multinational, backed by a clear vision and actionable values tailored to local markets, will put itself in a position to succeed.
Global organizations that are committed to transparency have the scale, both globally and locally, to truly make a significant positive impact – whether it be in the quality of the products and services they produce, the jobs they create, their support of local suppliers, their contribution to community initiatives or being responsible stewards on sustainability issues. Being big doesn't equate to being bad. It means you have the potential to do great things on a large scale that can enhance the communities in which you live and work.
Executives, educators and human resources experts contribute to the ongoing Leadership Lab series.