Barie Carmichael and Prof. James Rubin co-wrote 'Reset' to explain the impact of social media on the relationship between business and consumers.
In their book, authors Barie Carmichael and James Rubin argue that corporate character relates to how a company engages stakeholders internally and externally.
 

What happened?

“Tyson really went into a buzz saw in Tonganoxie,” Stull says. “I have no relation with Tyson, so I can’t speak for them; but it was clear that they did not expect the kind of resistance that emerged.”

Stull attended the public rallies organized against the proposed plant in Tonganoxie. He also was asked to discuss his research on the impacts of concentrated animal feeding operations (CAFOs) on the communities in which they operate. “While they do come with jobs, those jobs come at a cost in terms of increased demands on infrastructure, on schools, on law enforcement,” he says. “We also know pretty well that there are environmental consequences.”

“People in Tonganoxie really didn’t see any positives that would come out of that for their community,” he adds. “It’s a small community; fairly well-to-do. There isn’t a high unemployment rate there…and so what’s in it for them? Their answer was ‘nothing.’”

But what really angered individuals opposed to the plant, Stull says, was the secrecy surrounding the project. Before Tyson and local officials went public with plans for the poultry plant, the deal was code named “Project Sunset.”

The perception, he says, was that Tyson suddenly was coming into the community, receiving a bunch of tax abatements, and nobody bothered to ask residents for their input. “People were, from the very beginning, predisposed to oppose it,” Stull says. “And then, once they started learning more, they became even more opposed to it.”

A perceived lack of transparency can occur when companies negotiate only with individuals who will benefit from the development. “They don’t meet with educators or law enforcement or other interests within a community that will be impacted, often negatively, by this kind of development,” Stull argues.

Age of ‘radical transparency’

Enabled by social media, opposition to the Tyson and Prestage processing plants quickly coalesced. Barie Carmichael, a fellow at the Darden Business School’s Batten Institute for Entrepreneurship and Innovation at the Univ. of Virginia, has spent more than a decade writing case studies about the evolving relationship between society and corporate America. As co-author of “Reset: Business and Society in the New Social Landscape” with James Rubin, a former assistant professor of business administration at the Darden School, Carmichael says the current landscape in which business must operate has evolved on a steady decline of trust in business that has converged with the rise of the internet, social media and growing expectations from the public that businesses should be socially responsible.

“Social media is just a tool, but who is a reporter is blurring lines,” Carmichael says. “What is fact, unfortunately, is a matter of debate. Who is an influencer has changed dramatically, and how people consume information has changed dramatically.

“If I were a classic business person, I’d be talking about barriers to entry, which is how companies can be successful because they create such a moat that it’s hard to go to business,” she continues. “The barrier to entry – for visibility for the rank-and-file public – has collapsed. Social media has violently changed this; it’s what I call radical transparency.”

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"As we looked at locating a plant in Tennessee, we were open and transparent about our planned project with a wide range of people in the community."- Doug Ramsey
 
Carmichael and Rubin argue that the power to shape corporate narratives has shifted to a web-enabled public with the power to create and move information as well as act on the information they consume. Individuals can decide to buy or boycott a product based on what they read on the internet, and individuals can persuade others to do the same. This type of “stakebroker” influence has transformed the way corporate America engages with customers, shareholders and other stakeholders.

“It’s a new way to describe the new power loci in this whole social media environment,” Carmichael says. “An example of the emergence of the ‘stakebroker’ from the book is the Mylan Epi-Pen controversy. You had EpiPen go from people maybe not happy with the price that was established with it to losing market share, and CVS establishing a generic version of that product. That never existed before.

“That multiplier effect happened as one individual citizen said, ‘I don’t like this.’ She started a petition [and] in a matter of weeks 200,000 letters to Congress were generated. That is from a standing start; that’s pretty amazing.”

Citizens Against Project Sunset (CAPS) organized community meetings to air their concerns about the project. The group also launched a social media campaign that attracted more than 4,000 followers. A website soliciting donations to a legal fund on behalf of residents appeared on www.nototyson.com. Opposition similarly formed in Sedgewick County, Kansas, when news emerged that Tyson was considering moving the plant outside of Wichita, Kansas, the largest city in the state.

Lesson learned?

In the new social ecosystem, according to Carmichael and Rubin, executives must understand the impact of business decisions from an “outside-in” perspective, not through a corporate lens. Carmichael says executives are acknowledging that some problems are too big for an individual company to solve on its own. “Executives are realizing that they need ‘we’ solutions, not ‘me’ solutions,” she says.

Executives at Tyson Foods appear to have received the message.

“As we looked at locating a plant in Tennessee, we were open and transparent about our planned project with a wide range of people in the community,” said Doug Ramsey, group president of poultry for Tyson Foods. “We talked with dozens of people – not just community leaders – about the project early in the process leading up to our announcement and listened to their feedback. This led us to a partnership with the whole community of Humboldt and this is how we intend to approach projects like this in the future.”