The Lost Art of AEG’s Business
by Tony Chavira
The Harvard Business Review published an interesting study that basically said that companies become stronger and better-appreciate in long-term value when they engage their clients and staff in socially-positive practices. Here's the breakdown:
Institutional logic holds that companies are more than instruments for generating money; they are also vehicles for accomplishing societal purposes and for providing meaningful livelihoods for those who work in them. [...]
Rather than viewing organizational processes as ways of extracting more economic value, great companies create frameworks that use societal value and human values as decision-making criteria. They believe that corporations have a purpose and meet stakeholders’ needs in many ways: by producing goods and services that improve the lives of users; by providing jobs and enhancing workers’ quality of life; by developing a strong network of suppliers and business partners; and by ensuring financial viability, which provides resources for improvements, innovations, and returns to investors.
Of course, it's easy for a company to write up a well-worded mission statement that maybe sells a few clients on how much they care for a wide, more socially-beneficial cause. But practicing what you preach is a different story. AEG, the Anschutz Entertainment Group, wrote this in their Community Outreach statement:
Since its inception, AEG has been dedicated to utilizing its resources to enrich the lives of children and families in need. Spreading joy through charitable activities has been an integral part of the Company's heritage from its earliest days. Establishing foundations that focus on public service initiatives, community outreach, and volunteerism in the areas of learning, the arts, and the environment continues to be one of the Company's top priorities.
And then this happened:
Mr. [Bryson] Strauss was to supply fine artwork for the real estate marketing event on January 19, 2011, designed to attract potential buyers to the Ritz-Carlton Residences’ multi-million dollar penthouse suite, which remained unsold at the time. Mr. Strauss brought in several famed artists who provided their works for display at the event, including Shepard Fairey, creator of the Barack Obama "Hope" poster, and three critically-acclaimed street artists: Mear One, Chor Boogie and Shark Toof. Other featured artworks at the event were by legendary photojournalist Henri Cartier-Bresson, David LaChapelle, and Garret Suhrie. Following the successful party and the sale of Mr. Fairey's works (which were then removed), AEG asked that Mear One, Chor Boogie and Shark Toof continue displaying their artwork because the penthouse would be shown to more potential buyers in the future. The artists agreed, but on condition that their multiple pieces of artwork eventually had to be returned, and had to be professionally de-installed under the supervision of L.A. Art Machine.
However, several months later, after Mr. Strauss and the artists had already made arrangements with AEG to retrieve the artwork, they were told that the artwork had been ordered removed by AEG and then disposed of as part of a routine cleanup.
"My clients were shocked by this admission and expected an apology, as well as payment for their artwork. AEG offered neither,” said Mr. Zohar. “Apparently they thought my clients lacked the resources and courage to take on such an influential and powerful business. They were wrong.”
Building a strong, socially-responsible business outside also means being a strong, socially-responsible business inside. And judging by the popularity of urban advocacy movements like Occupy Wall Street, this is really just the wrong time for multinational corporations to do things like this to local artists. Take it from Rosabeth Moss Kanter, the Ernest L. Arbuckle Professor of Business Administration at Harvard Business School and the chair and director of Harvard University’s Advanced Leadership Initiative:
If companies are to serve a purpose beyond their business portfolios, CEOs must expand their investments to include employee empowerment, emotional engagement, values-based leadership, and related societal contributions. [...] Corporate responsibility for society fell out of fashion as economic logic and shareholder capitalism came to dominate assumptions about business and corporations became detached from particular places. In today’s global world, however, companies must think differently.