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Research Paper Measuring Sustainability: An industry case study of Maersk Line

How could I forget to blog about the CSR Academic Conference I was invited to attend in October! It was a great experience and an amazing opportunity to both  meet academics and practitioners and of course to present my research paper. Above all, it was an honour for I was the only undergraduate to attend and to even present a paper. Having been the youngest, I must admit I was underestimating myself. However, my attitude changed when I realized I was the only one to discuss the VMM and the Barcelona Principles which surprised me for this is a milestone that has changed the whole industry. Besides, linking it to another topical issue – CSR, added an interesting twist to the whole paper which in my opinion makes it a unique piece of work. There were also other things that sparked my attention during the conference. For example, after presenting I was sarcastically asked if I was trying to offer a way of measuring ethics. Well, I wasn’t even intending to because obviously there is no way to do it. Why? If we simply start our reasoning from the definition of ethics (moral philosophy) we would figure out that this is something personal, something that depends on one’s own views, something that is influenced by cultural/political/socioeconomic/ historical and even age factors. In other words, what is good for me might not be good for you and vice verse. Hence, it cannot be measured. Hence, the real purpose of my paper is not to measure an organisation’s ethics but its stakeholder relationships in terms of preference, attitude and engagement regarding the company’s CSR activities, as it is the case of my paper. That’s not are quantitative data which makes it hard to evaluate even with the VMM. It is easy to prove the first four boxes of the VMM (awareness, knowledge, interest and preference) but how do you prove the last one – action, e.g. behavioural change? This is what every communication campaign should be aiming at – a behavioural change in target audiences, not just creating of buzz and that is why it is very important to constantly measure and evaluate it. The VMM offer a way of doing it but it seems to me that there are still areas of improvement and this is what I argue about in my paper. I believe there is no (and should be not) a universal formula of measuring performance because each and every industry is unique and therefore requires evaluation techniques tailored specifically to the specific communication program and organisation, in the case of my paper Maersk Line.

I forgot to mention that this paper started as a uni project and  Maersk Line’s Head of Climate and Sustainability liked it so much that I was invited to their corporate headquarters in Copenhagen! Then their Senior Director of Sustainability was very pleased with what I did which led to another invitation which I am planning to do in near future. What is more, I was quoted in their global Group newsletter as a specialist! So, this is the paper I presented:

 

Abstract

Purpose – The purpose of this paper is to prove that the new International Association for the Measurement and Evaluation of Communication (AMEC) measurement and evaluation guidelines (the Barcelona Principles and Valid Metrics Matrix) are useful tools for measuring ethical behaviour and they could and should be even applied to industries with specific requirements.

Design/ methodology/ approach – this paper evaluates the role of the Barcelona Principles and the Valid Metrics Matrix (VMM) as a useful platform for measuring the outcomes of Maersk Line’s efforts to showcase ethical behaviour .

Findings – Maersk Line tends to focus on the technical aspects of public relations; however, the new AMEC framework could further improve the carrier’s evaluation indicators by enabling the company to measure the combination of reporting its environmental footprint and its quality of building and sustaining relationships.

Originality/ value – Many companies focus their CSR efforts on customer satisfaction. However, little is done in terms of measuring performance. This paper provides an interesting perspective of this issue   and focuses on applying the new CIPR measurement and evaluation framework to sustainability business strategies.

Key words Corporate Social Responsibility, Barcelona Principles, Valid Metrics Matrix, AMEC, Maersk Line, Measurement, Evaluation

Paper type Research paper

1.   Introduction

“He who would learn to fly one day must first learn to walk and run and climb and dance; one cannot fly into flying”

NIETZSCHE

 This quote perfectly describes the long journey that the public relations industry has started in terms of developing its measurement and evaluation framework. After more than a decade of learning and improving, the public relations industry is ready to embrace these new changes which allow every public relations practitioner to “fly”, i.e. to demonstrate their success through their ability to influence change and meet objectives. That quote may also be valid for every public relations professional: one must always upgrade their knowledge and skills to remain competitive and useful for their organisations or clients. In other words, customer satisfaction starts with improved quality. Stakeholders are adding CSR to the mix of their expectations for good services. As a result, measuring public relations’ impact on businesses has never been of such importance.

It is interesting to see how one particular industry has responded to the challenge.  For the maritime industry in particular, these new trends of measurement mean that their PR has entered new waters. Even though most of the concepts of Corporate Social Responsibility have been spreading through businesses in all sectors, some of the conglomerates in container shipping, like Maersk Line, are already far ahead in their proactive approach compared to other industries which is an interesting field to explore.

Back in 1994, the International Public Relations Association predicted the gradual priority of outcomes over outputs, but it took until 2010 to secure the introduction of a new measurement framework, i.e. the Barcelona Principles (INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994; INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994a). The Barcelona Principles marked both the death of the Advertising Value Equivalents (AVEs) and the start of a new era in measuring public relation’s impact on businesses. Here we can ask: can we measure everything? Can the Valid Metrics Matrix (VMM) be applied everywhere? The new toolkit still does not provide all the answers but it is the backbone for showing the real value that public relations can bring to business quality.

This paper evaluates how the maritime sector has responded to the new CSR trends by examining Maersk Line’s sustainability agenda. The paper then applies the VMM to Maersk Line’s green strategy with the attempt to argue that definitive research needs to be done to prove to businesses that the new measurement and evaluation guidelines could and should be applied everywhere, even to industries with specific requirements like container shipping. Finally, the paper suggests that the VMM should be further improved in order to provide more accurate ways of proving public relations’ positive contribution to managing reputation.

2.    Corporate Social Responsibility and the Container shipping industry

Corporate Social Responsibility is one of the most important issues and developments of the 21st century. Within the field of sustainability two major CSR movements could be identified: environmental and social. Environmental issues are often the sole focus on sustainability programs (as seen in CLIFTON and AMRAN 2011; HOGAN 2010; DUCKWORH and MOORE 2010; HORRIGAN 2010; REGESTER and LARKIN 2008) with societal activities usually overlooked, especially in sectors that are hugely exposed to environmental disasters. Nevertheless, increased activity in environmental management can be evidenced by actions taken by both the government and private sector resulting in proactive or reactive management company policies (FISK 2010; HADDOCK – FRAISER and TOURELLE 2010; PEACH 1987; TENCH and YEOMANS 2009).  Where does container shipping stay on the proactive – reactive agenda axis? Unfortunately, the marine industry is one of the most passive sectors in terms of measuring and reporting its environmental footprint. Protecting the environment is the biggest sustainability challenge for container shipping and yet no international regulatory framework exists despite the fact that international shipping, according to recent studies, carries more than one third of the world trade with a rapidly growing demand expected to grow even more (WORLD SHIPPING COUNCIL 2011; INTERNATIONAL MARITIME ORGANIZATION 2010). Subsequently, it is further exposed to possible unethical practices (PRUZAN – JORGENSEN and FARRAG 2010; KANTER 2010).

However, this provides only a partial explanation of the whole problem. When the social CSR movement has started shifting from a mere “shareholder as stakeholder” concept  ( as seen in HADDOCK – FRASER and TOURELLE 2010) to a beware–of-the–activists one, i.e. emphasizing on the importance of end users in sustainability reporting (as seen in HADDOCK – FRAISER and TOURELLE 2010; JOHAR, BIRK and EINWILLER 2010), the marine industry still fails to make reputation and legitimacy within a society key value propositions, let alone measuring its performance and relationships with stakeholders.

 Against an obvious lack of regulatory standardization Maersk Line’s decision to become the first carrier to take actions of compliance and subsequently of adoption of a proactive sustainability business strategy seems to deserve admirations. World’s largest container shipping company measures, reports and reduces its environmental footprint and has recently started increasing its transparency  and end user engagement. But how does the conglomerate measure its performance?

 3.     Measuring sustainability

 Most businesses still view and measure quality in terms of customer satisfaction and container shipping is no exception. Maersk Line has already introduced various programs and initiatives to both showcase best practice of measuring and reporting its environmental footprint and to encourage other carriers to follow this fine example (see Appendix…) However, this is the technical aspect of public relations – whether there are no errors, no pollution, delays, no mechanical breakdowns or no customer complaints (as seen in INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994). These aspects are doubtlessly very important, especially for high risk industries like the maritime business. What about the managerial aspects of quality? Both service and process require quality. Service delivery is of course of greatest importance; however, process plays a vital role in terms of quality performance. Therefore, some marine companies, like Maersk Line, have realized the essential role of performance in achieving their goals.

 “The company has always had a good reputation of strong values so now we have a solid foundation to build on. However, 3-4 years earlier there was almost no communication to stakeholders but this has changed. The decision to communicate much proactively is a great opportunity to take the lead and win by doing so…We are trying to mobilise the whole company in order to meet our customers’ needs…We are going to develop a special training program for our staff that will be delivered this year”

                                                Maersk Line Head of Climate and Sustainability

 The key to understanding corporate reputation has become the measure of the relationships it is based on, especially with the rise of CSR. The world’s largest container shipping company has obviously become concerned about it, implementing it into its long – term strategy. The need for transparency, reliability and lower costs are already exerting pressure on International Maritime Organization (IMO) to eventually introduce a global regulatory framework, and thus on business operational models in the industry where customers are already greening their supply chains. As a result, the urge for proof of ethical behaviour has changed the perception about organisations. However, is it enough for Maersk Line to only measure its environmental footprint when it is now seen more as a strategic innovation partner rather than a mere cargo carrier? When the levels of communication channels surrounding sustainability have increased and altered the way businesses manage relationships with their various stakeholders? The result is an increase of the importance of these relationships. Therefore, building, managing and measuring them is fundamental to an organisation’s success. Thus, it could be argued that understanding how to measure should become a part of the sole focus of Maersk Line’s strategy: if relationships can be measured then they can be improved, and so could communication effectiveness and overall performance (PAINE 2011).

4.    The Valid Metrics Matrix

 According to Fraser Seitel, a former vice president for public relations for the Chase Manhattan Bank (as seen in INTERNATIONAL PUBLIC RELATIONS ASSOCIATION 1994), the underlying concept in all definitions of public relation is the word performance. In other words, performance becomes a communicative concept which in turns makes public relations the key to managing an excellent reputation. But what does excellent reputation mean for container shipping? How do we know it is well managed?

The recently introduced Barcelona Principles and VMM are a solid platform that could be used to measure excellent reputation and stakeholder relationships in a time of great uncertainty in the maritime sector. However, these guidelines are not the definite rules of measurement for public relation’s impact reaches different audiences and appears in a variety of forms, i.e. crisis communication, reputation building, community engagement. In other words, there is no universal metric for all PR activities, even though the industry was entirely used to the already doomed AVEs (CIPR 2010). Thus, to truly communicate the value that public relations activities add to achieving business goals, measurement was agreed to be seen as a continuum of metrics – a combination of outputs and outcomes that ideally leads to achieved business results tailored specifically to match the program’s objectives (AMEC 2011a)(Figure 1: A Very simplified way of how PR works).

 

Figure 1: A Very simplified way of how PR works

As seen in Figure 1, the Matrix is a simplified representation of how PR functions – starting with disseminating information (PR Activity) to third parties (Intermediary) which then communicate the message to stakeholders (Target Audiences). Generally, the philosophy behind the Matrix lies in the concept of behavioural change: moving from mere target market awareness and knowledge created by PR activities to preference and action amongst target audiences (Figure 2: The Valid Metrics Matrix).

   .Figure 2: The Valid Metrics Matrix (AMEC 2011)

This appears to be the focal point of every campaign for two primary reasons. Firstly, this very box shows the final outcome of any communication program, i.e. whether the business objectives were achieved or not.  Secondly and most importantly, the last grid is said to serve as a proof of the positive contribution public relations practitioners make to an organisation’s reputation management. Therefore, measuring the impacts of PR activities on target audiences is crucial. Demonstrating the shift from Awareness, to Understanding, to Interest/ Consideration, to Preference could easily be done through the application of a continuum of metrics which, most of the times, even overlap (see Figure 3: Reputation Building). How could it be proven that effective public relations activities were the heart of a company’s successful end results? Was PR the reason behind the increase in Maersk Line’s market share, profit, customer demand or cost savings in 2010 and if so could it be measured and explained using the VMM?

 

Figure 3: Reputation Building (AMEC 2011)

The launch of the first global standard for PR measurement allows a careful analysis and evaluation of the managerial impact of quality to sustain Maersk Line’s reputation. In 2010 A. P Moller–Maersk Group reported both record–breaking net profits and hitting of sustainability performance targets ahead of schedule (WRIGHT 2011; A.P MOLLER–MAERSK 2010). In contrast, demand rates have been continuously dropping in 2011 despite the expected demand in growth, the progression in creating sustainable shipping that led to customer satisfaction and increased visibility to end users (MAERSK LINE 2011). The VMM can easily illustrate public relations’ positive impact on the shift and increase in Awareness, Knowledge, Interest and Preference levels (Figure 3: Reputation Building). How can we demonstrate that behavioural change has taken place?

The new framework improves the company’s evaluation indicators because it enables it to measure the results of its efforts in terms of building and sustaining relationships; in terms of improving its communication channels. To illustrate, Maersk Line has been awarded various prizes because of its investments in sustainable growth and transparency and has also won plaudits from their ethically conscious customers and media, including the Financial Times, The Wall Street Journal and the Guardian (www.maerskline.com; MAERSK LINE 2011; JOURNAL OF COMMERCE 2010; www.changingthewaywethinkaboutshipping.com) This certainly proves that the company has already entered the Preference Grid (see Figure 3: Reputation Building). The launch of Maersk Line’s various initiatives certainly proves that Awareness, Knowledge, Interest and Preference have been created:

“We see our customers putting more and more emphasis on environmental issues and now they started looking at transportation as well. We can choose to do nothing and risk losing out business but we can also respond. But we want also to help this trend grow, we want to drive that demand and create solutions…The decision to communicate much proactively is a great opportunity to take the lead and win by doing so”, Maersk Line Head of Climate and Sustainability*

Maersk Line manages successfully to combine corporate continuity and sustainable trends. It has already set a solid foundation for measuring and reporting its environmental footprint in order to develop a greener and more transparent company. Even though the world’s largest ocean carrier is a pioneer in adopting its ethical performance in a rather unethical industry, it still has areas to improve. It could be argued that Maersk Line tends to focus on the technical aspects of public relations, i.e. its carbon and C02 footprints or its supplier performance.  The complex and changing nature of relationships between an organisation and its publics not only requires measurement and evaluation of the outputs but also of outcomes to provide competitive insights. It could be argued therefore that the Barcelona Principles and the VMM could be a useful platform for measuring Maersk Line’s performance: a combination between the carrier’s efforts to showcase ethical behaviour by reporting its environmental footprint and its quality of managing relationships in and outside the organisation. However, it seems that the new PR measurement and evaluation framework proves to be insufficient in terms of driving behavioural change in target markets. Therefore, it could be argued that the VMM should be further reevaluated and improved in order to ensure more accurate measurement of public relations’ effective impact on managing business reputation.

M

 
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Posted by on February 2, 2012 in CSR, CSR in container shipping, PR

 

Eyeless in Gaza: the misuse of language in war reporting

Israelis and Palestinians have been fighting for about  century over land. The battles  – involving many other issues than just land, have been fought with tanks, rockets, aircraft, fists, stones, sticks, you name it. However, nowadays battles do not happen only on clearly delineated fronts. The battles of the 21st century are fought on editorial pages, TV screens and especially on the Internet. Satellites and cameras made transmission of text and visual context almost instantaneous so wherever we live in the world we stay “informed”. But is everything as “real” as it seems?This globalization and unification of communication have had a big impact on war turning it into a global spectacle, especially for those not directly involved in it.  Basically, if you can dominate world media and influence people’s opinions, you can defeat your enemy on this second “virtual” front by letting global levers like trade sanctions, decreased tourism etc. constrain him.

That is a good reason why media often reduce highly complex conflicts such as the Israeli/ Gaza one. Sweeping instances of media distortion – when big media report important war conflicts wrong – fascinate me. That’s why I decided to write my dissertation on this particular topic, using the Israeli/Gaza conflict as a case study.

Having witnessed the 2008/09 Israeli/Hamas war I had the chance to see how international, Arab and Israeli media reported the conflict. Being 20 km from Gaza I got pretty much real experience that I could compare with what was reported. You can imagine how shocked I was while reading and hearing different stories on the conflict from a variety of newspapers and TV channels. They were reporting the same subject but why did it sound so differently?

Words, words, words – “power of media is all about words and the use of words. It is bout semantics” Robert Fisk.

At the Independent Literary Festival in Woodstock 2010 I had the pleasure to hear Robert Fisk, the best journalist reporting on the Middle – East, speaking about the misuse of words by journalists.

It is about the employment of phrases and clauses and their origins. And it is about the misuse of history; and about our ignorance of history. More and more today, we journalists have become prisoners of the language of power’.
It made me think why is it so? Is it because journalists don’t pay enough attention to the words they use? Or is it on purpose? Sitting in the old Woodstock Church in Oxfordshire and listening to the discussion I was wondering why and I couldn’t give myself a good answer. I’m still looking for the answer but after hearing Robert Fisk’s lecture it became a bit clearer to me: power of media is nowadays all about words…
M
 
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Posted by on January 30, 2012 in Media and Politics, Middle East, Politics, PR

 

Becoming green: how small things can have a big impact

Sometimes small changes can make a big difference and Holland & Barrett are a good example. Nowadays Corporate Social Responsibility is becoming an important issue for all industries and that’s why it’s crucial for companies to take a lead on their support for the environment.

 Linking the banning of plastic bags into its 25-year of a butterfly conversation project positioned Holland & Barrett as the first high street retailer to lead the way on a major environmental concern. Under the banner “The Butterfly Effect”, Pegasus PR launched a campaign aiming to highlight H&B’s corporate responsibility, its 25-year sponsorship of the Large Blue butterfly conservation project and achieve significant media coverage. The campaign, launched at London Zoo reached an audience of more than 56 million and was featured in major press including the BBC and the Daily Telegraph. Through the PR campaign, H&B successfully raised the profile of its corporate responsibility towards green issues and its overall environmental credibility. It also won a Gold CIPR Pride Award for Corporate Responsibility and therefore I decided to have a closer look at it as an example of best practice. The campaign was quite creative employing the well-known “Butterfly Effect” theme to add an interesting twist to the story. The strategy was clear: to raise awareness of H&B as an environmentally aware retailer and communicate social responsibility to its eco conscious target consumer. What seems really interesting to me is the fact that they added a political angle to capture the attention of the business media by releasing comments from H&B’s CEO challenging the UK government to encourage other retailers to follow its positive lead by introducing a tax on plastic bags. Furthermore, this controversy was used to grab media attention on an old topic: introducing half measures such as plastic bag charges or a total plastic bag ban?

The campaign was measured by attendance at the briefing, number of press cuttings, total audience reach and equivalent PR value. In terms of their objectives it seems that the campaign hit its targets and even exceeded them. However, in my opinion measurable outcomes should have been set to make the campaign look even better, i.e instead of just aiming to raise awareness of H&B as an environmentally aware retailer a clear percentage could have been given and then compared to the initial perception of media and target audience.

 
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Posted by on January 30, 2012 in CSR, PR

 

All I want for Christmas is….BULGARIA AIR!

“I’m dreaming of a white Christmas, with every Christmas card I write may your days be merry and bright and may all your Christmases be white!”

Do you remember this song? I bet you do! Do you still want a white Christmas? I bet you don’t!

Especially if you are stuck in Heathrow or another airport for a couple of days! As Western Europe was hit by an unusual amount of snow major airports were shut leaving hundreds of people stuck for a couple of days! What should airlines do in such a crisis? Some of them provided beds, food and even clowns to entertain their passengers in Frankfurt. Others, like BA, provided meals, hotel rooms, ticket refunds and ticket substitutes within the next 12 months. If only BA could postpone Christmas!

I’m lucky enough to be home watching all this on the news in my comfy living room in Bulgaria. Here there’s far more snow, temperatures are more freezing, weather conditions are generally bad during the winter, Sofia airport can’t be even compared to Heathrow and it’s still operating. So I’m wondering why measures weren’t taken on time? Was it that hard to predict this scenario?

Anyway, all this is not even surprising me. What really caught my attention was the kind gesture Bulgaria Air (Bulgaria’s National Carrier) made to all Bulgarian passengers stuck in British airports.

The number of Bulgarian citizens in the UK is large. Most of them are students, like me , who want to fly back home for the winter holiday.  Most of them booked their flights with a low – cost airlines like easyJet or Wizzair which means no refunds or entitlement of anything.

Fortunately they will be able to see their families as Bulgaria Air decided not only to save its own passengers with delayed flights, but also to send extra aircraft for all other Bulgarians no matter which airline they fly with! Airplanes were sent to Heathrow, Gatwick and Luton a couple of times and more airplanes are expected to fly to the UK these days.

I’ve never heard of another airline doing that and I think that’s very generous, humane and simply the greatest Christmas gift for all those helpless people in airports! What’s more, Bulgaria Air’s profile was definitely increased and I  think it should be an example of how to deal with such a crisis without causing a massive outrage and even keeping loyal customers and winning new ones!

M

 
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Posted by on January 30, 2012 in PR

 

Strategy and Objectives: which one comes first?

Recently I had an argument in university with some of my classmates about whether strategy or objectives come first in a PR plan. It was a long argument, my classmates even looked at books to find the answer and interestingly enough there were different versions in those books we found.

I personally think that strategy comes first – it’s the whole lot, the meta message, isn’t it? It’s the big picture of everything, the whole sense. Every sense is formed by many little “senses” so to say and these are the objectives – things we want to achieve. What do you think?

M

 
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Posted by on January 30, 2012 in PR

 

PR challenges for Egypt

The ongoing protests in Egypt against president Mubarak  have caused chaos not only in the country but also in the PR industry. It’s hard to rebuild damaged reputation especially when it comes to top travel destinations like Egypt.

The uprising made thousands of tourists evacuate from country’s major cities leaving hotels and resorts empty. Even though most resorts are 8 hours away from Cairo and other big cities it seems that tourists still feel frustrated and are reluctant to stay or go to the country.

Comms specialists are trying new strategies to rebuild Egypt’s international reputation. The main idea is to provide clients with accurate up-to-date information. PR practitioners constantly appear on a number of regional radio stations explaining that key tourist areas are unaffected trying to put them in context, i.e most of them are far away from Cairo and even are serviced by a different airport.

Would it be enough? In my opinion, once protests are gone, tourists will start flying to Egypt again because it is an interesting country with historic heritage.

M

 
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Posted by on January 30, 2012 in Middle East, Politics, PR

 

If your government shuts down your internet, it’s time to shut down your government

Some governments are willing to commit to open web access for all, no matter what. In 2002 Estonia made internet access a human right. Finland introduced a law last year that guarantees every sitizen broadband internet. .
However, some countries have recently tried to suspend the national internet. We all wintnessed the internet blackout in Egypt and the censored news and social media in Tunisia. The notorious news coverage blackout posed by Israel made us “eyeless in Gaza” but was it actually a winning strategy? Did such radical measures stop the protests?

Certainly not. If anything, one lesson seems to be that enforced closure of internet and media access can only do harm: if your government shuts down your internet, it’s time to shut down your government. Especially on the Second Front – media!

M

 
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Posted by on January 30, 2012 in Media and Politics, Middle East, Politics, PR