Luxottica, world leader in premium and luxury prescription frames and sunglasses, stuns all with daring stakeholder relationship program

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Quanno ce vò, ce vò (pronounced: cannocievò, cievò).
So goes an old roman expression indicating that when something is so, it is so… no matter what, no buts or ifs…

In a particular period in which my Country (Italy) and its private, public and social elites are undergoing a sustained (and increasingly intolerable) intellectual deterioration with dire consequences on the well being of its citizens, if and when something positive does come up, it is important to underscore it, even if remaining critical (also of oneself… the author acknowledging being part of those elites).

Luxottica Group is the world’s leading designer, manufacturer and distributor of prescription frames and sunglasses in the premium and luxury segments, with a consolidated income of 5.2 billion euros.

Ceo of Luxottica is Andrea Guerra, a young and highly reputed executive, one of the maybe 10 Ceo’s of major Italian companies who are under 60

Only a few days ago, with no explicitly visible push by the Company -queried on why no mention on their website, nor even a laconic press release via wire services, the shy but sober answer was ‘we don’t like to announce intentions but results’, Italy’s major financial daily Il Sole 24 Ore, dedicated much space to reporting that trade unions -in place of the consolidated habit of a salary increase as outcome of traditional contractual negotiations- had agreed with management to cooperate on a highly innovative scheme which creates, through the application of pre-agreed upon performance indicators, a basic and substantial monetary reserve -approximately 2.6 million euro per annum- which the company’s 8000 employees (average monthly salary 1.200 euro) may access and choose to use directly for health, family education, professional training, shopping, mobility etc…

For my country, this is a highly innovative agreement, as mainstream labour negotiations have traditionally resulted in salary increases and -as I know only too well seeing this from both sides of the fence- employers end up paying more than double of what employees actually receive….
A simulation in the Sole 24 Ore article indicates that in the traditional system if an employee receives 50 the organization’s cost is 100. In this new system if the employer pays 100, the employee receives a value of 130.

Admittedly, the scheme raises many interesting and delicate questions related to the public and social role of the corporation, its employees and their trade unions.

And the answers to those questions clearly reside in the ‘public relations infrastructure of a given territory’ i.e. the legal, political, economic, socio cultural, active citizenship and media systems of that territory that effective public relations professionals need to be aware of and continually monitor to understand their many impacts on a global organization such as Luxottica’s self representation practices.

All this, of course, in line and coherent with its generic principles.
One of which, at least in this case, has to do with a strong sense of responsibility towards the sustainability of one of the company’s major stakeholder groups.
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You might ask, but what does this have to do with public relations?
In my view, one hell of a lot!

Given the current crisis, employers everywhere are in desperate need of proactive cooperation, collaboration and motivation of their people.
For most organizations, this is today a priority and much work is underway in new approaches to employee communication.

For example, the consultancy I work for (Methodos) has developed since the end of last summer, and has been actively deploying a peculiar approach to ‘how to involve your employees in understanding and coping with this crisis’ based on the principle that only if and when the organization listens to and supports the crisis understanding and the needs of its individual employees, can it hope to receive their proactive cooperation in its own crisis.

You will agree, I am sure, we can define this as an application of the two way symmetric model and a stunning example of effective stakeholder relationship governance.

Although, neither I nor the company I work for had nothing to do with the Luxottica decision and learned about this from the newspaper, it seems to me that this approach goes clearly in that direction.
In fact, contrary to most other companies, Luxottica has just announced highly positive results for 2008, but surely (I presume..) expects to suffer in coming months.

Apart from the very positive news that even trade unions accepted this unusual practice, thus testifying that at least someone over here has switched over to the twenty first century…, I was impressed by the savvy thinking of management.
A vivid example of what I referred to here some weeks ago (the business of business is..responsible business).

3 COMMENTS

  1. The idea of bringing new conceptual thinking to total employee compensation is refreshing. How will PR play in this unfolding scheme?

    While Luxottica’s approach promises hope, it seems that relationship building hinges on developing yet more elements of employee empowerment. This would include a model replete with: (1) imparting vision, (2) removing barriers for individual and group performance, (3) providing structure for members of the firm to take action, and (4) developing self-efficacy.

    In my recently completed dissertation I observed an organization that socially constructed leadership to act on its members’ mutual needs–the essence of 21st century leadership. I discovered, rather than the leader establishing meaning, members of the firm constructed meaning that directed leadership opportunities for each member of the firm. This led to the firm taking action that might have escaped the leader at the top of the firm. This, I believe, is the overwhelming power of two-way communication.

    Your story here about Luxottica suggests an enterprise that is trusting its members and willing to reward personal behavior that serves organizational goals. Imagine the power of an organization that shifts the role of relationships in the firm from influence to meaning making, from dominate to participative, from motivation to a framework for action, and other empowering behaviors, all evidence of social construction.

    Maybe I am stretching the limits of PR, but I do not think so. In these tough times, we must vigorously confront reality, expand individual and organizational knowledge, and create safety for members of the firm to take legitimate bold action. This is the essence of two way communication.

    This is a dynamic approach that could inform the firm’s public relations planning and execution in a powerful way.

    Food for thought. I will be further developing this concept and would welcome your feedback.

    Tim

  2. How great to hear from you Tim and a warm welcome here! I am happy to learn you have completed your dissertation on leadership and, from the few words you have shered with us here, I am very very curious to have an opportunity to read it. You have three options, Tim: a) you send me a copy and I will make it available here to interested readers; b) you send me a copy, I will read it and write a post; c) you send me a post summarizing it and I will post it here (together with a copy fo the dissertation for me to read). Of course I ma sure readers would prefer the third with an option to also read the full text. You decide.
    You considerations are higly stimulating and, no, I do not think you are stretching the limits of pr eny more than you are stretching, by your bold thoughts, the limits of management.
    In my view, members of organizations permanently participate in the construction of meaning and sense…whether they like it or not..
    And sometimes (always?) even the destruction of meaning and sense is a constructive feature.
    Leadership (what you call the essence of 21st leadership..)appears on the scene when and if this process happens with awareness, and with a sufficient amount of governance to enable its orientation towards accelerating shared organizations aims and objectives.
    I agree that effective two-way and symmetric relationships can only happen when the organization listens to, understands and interprets, together with traditional and still relevant boundary spanning, the expectations of its stakeholder publics and incorporates these into that complex patchwork which alwasy faces leadership when it needs to take a decision.
    Thank you for your thoughts,
    toni

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