The Cycle of Continuous Influence and Freedom to Operate
Businesses today can’t assume their products and services will be accepted just because they comply with regulations and are proven safe and effective. Gaining regulatory approval is only the first step to achieving and maintaining market acceptance. It’s important, of course, but not enough to earn consumer trust.
Being a socially responsible eater is a growing part of modern society. But, what is the definition of “responsible?” It’s a contentious topic on farms, in kitchens, in board rooms and across social media. A long list of products that were proven scientifically safe never made it to market or have seen limited market acceptance because the definition of “responsible” is constantly changing and becoming more complex.
Food companies experiencing stagnant growth and escalating margin pressure feel the heat from online consumer influencers who are powerful in the tribal debate about food. The demonizing of lean finely textured beef (LFTB), which became known as pink slime, is a classic example of a single person getting the attention of regulators and food brands and nearly eliminating a safe, sustainable product from the marketplace. Blogger Bettina Siegel’s 2012 anti-LFTB petition attracted a quarter-million signatures in less than two weeks while gaining the backing of several members of Congress. On the ninth day of the petition drive, USDA changed its school lunch policy on LFTB.
Food companies pay close attention to today’s growing consumer fascination with the relationship between diet and health. A growing number of people are demanding greater transparency and are changing their purchasing and consumption patterns. Successfully navigating the complex cycle of continuous influence (illustrated below) is critical to earning and maintaining trust and staying in business.
Business leaders can be resentful that a company’s freedom to operate is heavily influenced by outsiders. The time has come to acknowledge the fact that freedom to operate is dependent on a company’s ability to maintain public trust as the foundation of social license. It’s a risky proposition to think that trust and social license aren’t tied to financial success.
A sustained commitment to a specific set of principles and actions is required in building trust. Trust is not a talking point and there are no short cuts. Trying to circumvent this approach will be detected by people who are wary of companies looking to hide issues instead of engaging in trust-worthy practices in a transparent manner.
Business leaders place a high value on their freedom to operate – the ability to work toward achieving their vision and mission with limited restrictions and interference from others. The Enron collapse in 2001 cost the accounting industry its freedom to operate and resulted in burdensome and costly federal legislation for businesses. And, that’s just one example.
Maintaining operational freedom allows companies to innovate, explore new opportunities and conduct business with minimal interference. Freedom to operate is the ultimate reward and return on investment for companies that operate in a trust-worthy manner. In today’s environment, freedom to operate is based on consistently earning and maintaining social license.