Profit Propellers and Paper Bags Explained:
PROFIT PROPELLERSAre awarded to corporations and organizations that have recently done something interesting, innovative or brave in the area of ethical leadership.
PAPER BAGSAre awarded to corporations and organizations which have recently failed to prevent events they are probably quite embarrassed about allowing to occur.
Warner praised for protecting children,while Virgin indulges in pop music piracy …
A PAPER BAG goes to Royal Dutch Shell for being fined $137 million for asphalt price-fixing from 1996-2004 along with seven other suppliers and six road builders.
According to the European Commission, “the fines were highest for Shell, as it was a repeat offender and because it played a leading role in the cartel.” The one cartel participant that was not fined was BP, as it played the whistleblower and cooperated with investigators.
A PROFIT PROPELLER goes to IKEA for reaching a point in 2006 whereby 50 percent of its products are Forestry Stewardship Commission Certified. This is no small feat considering that wood is the principal product in more than half of IKEA’s products. Also, that the certification has four levels, from tracking of origin to sustainable forestry management by the supplier. IKEA has 12 full-time employees (foresters) collaborating with suppliers. As IKEA’s leadership says, “Low price, but not at any price”–a concept that is resonating very strongly with their customers.
A PROFIT PROPELLER goes to Hertz and Expedia for providing “green” alternatives to their customers. Hertz launched the Green Collection, an array of high mileage-rated cars, more than half of which are Smartway certified. Expedia made it easy for its customers to purchase carbon offsets for airplane travel undertaken through its TerraPass plan. These initiatives are inexpensive, yet provide first-mover advantage to both corporations in helping appeal to well-heeled travelers. The strategy also further differentiates the two corporations from their competitors in consumer service markets, which overall runs the risk of commoditization.
A PROFIT PROPELLER goes to SC Johnson for being cited by the U.S. EPA for the first consumer products company to join the Climate Leaders program and for reducing its greenhouse gas emissions by 23% per pound of product produced, making it one of only four companies in the program to achieve its 2005 goals.
A PROFIT PROPELLER goes to The Walt Disney Company for proactively moving to help cut down on sales of unhealthy food to children by unilaterally deciding to disallow licensing of its name and characters for use with food items that do not meet reasonable nutritional standards. Walt Disney also is changing the default side order at it park restaurants from French fries to healthier fare.
A PAPER BAG goes to Constellation Brands for apparent attempts to improperly influence a prospective customer’s purchasing decision process. According to the Bristol Evening Post, U.K. pub company JD Wetherspoon was running an eight-week trial of various wines from different companies to decide which would become the house brand for its 650-locations. Meanwhile, Constellation’s management wrote emails to employees, asking them to each buy a bottle of a certain Constellation wine per week at their local JD Wetherspoon pub and expense it back to the company. With two weeks of the trial left, an email was sent out begging staff to redouble their efforts and swell sales figures. When the emails were leaked to the public, Constellation publicly and unconvincingly denied it had been trying to distort sales figures, but claimed it was a “mystery customer exercise.”
A PROFIT PROPELLER goes to PepsiCo for proactively settling a Proposition 65 issuewith the state of California through paying a civil penalty and agreeing to eliminate lead-tainted labels on bottled soft drinks made in Mexico (some of which leak into the California market). Under the settlement, PepsiCo will begin phasing out lead-tainted labels on new bottles for products in Mexico and will take existing bottles out of circulation. L.A. City Attorney Rocky Delgadillo praised PepsiCo in announcing the settlement, stating, “Pepsi is here with us today doing the responsible thing.”
A PROFIT PROPELLER goes to Towers Perrin for clearly advising Tyco International Ltd., back in 1999 that the backdating of stock option grants was improper, likely illegal, and should not be pursued. At the time Tyco was run by now-convicted felon Dennis Kozlowski. Tyco’s compensation committee abandoned the proposal upon Towers Perrin’s recommendation.
A PROFIT PROPELLER goes to Dell Computer. Despite other high-profile problems encountered this year (exploding batteries, stock option problems, product delivery delays), the company still demonstrated leadership through setting the computer industry’s top recycling program, by agreeing to take back any old Dell Computer free for recycling (even if you do not purchase a new one, as Apple Computer requires). This will pay dividends in the long run as the Ethisphere Council anticipates that more states will follow the state of Maine’s “producer take- back legislation,” which will leave other computer makers more financially and legally exposed compared to Dell.
A PAPER BAG goes to Virgin for illegally downloading Madonna’s single Hung Up to resell on its own site. According to news reports, the VirginMega.com site “ignored an exclusive deal reached by Warner Music France with France Télécom and Orange” to sell the new Madonna song. VirginMega.com must now pay $350,000 in penalties as France Télécom’s Hervé Payan stated, “This is an amazing case of simple piracy by a respected company. Virgin behaved in a surreal manner by downloading the song, cracking protection measures and then selling it from their own website.”
