Corporate Responsibility: How values can guide your organizational activities
So much has been said on stakeholder management, corporate responsibility (CR), CSR and community impact that it can fill volumes of books. Still something is missing even though there are more standards available to guide new start-ups like the GRI, the UN Global Compact, OECD Guidelines for MNEs, ILO Conventions, ISO14001 and the ISO 26000 Standard on Social Responsibility. Below are some key issues that you might like to consider whether you are a startup or you want to embed CR to create societal impact. So can your corporate responsibilities reflect your organizational values? Perhaps these questions will help:
1. Is your CR and CSR related to your business purpose?
I often find a disconnect, between firm activities and firm business. Perhaps for greater synergy you need to find a connect between the things you do (marketing activities, CSR etc), the things you sell and the things you embrace as part of your culture. Here is one example.
If your business is related to finance or better still banking – do your teach children financial responsibility? Have you as a CSR initiative sponsored children’s accounts? Yes, it is a loss of revenue but these could be your future customers and if you think of it as a CSR initiative maybe the cost is justified? HSBC encourages MyMoney a bank account for children aged 7-17 and the opening account amount can be as little as £10. Debt is a big problem for the younger generation currently. According to Moody Analytics in a recent WSJ report, the millennial generation (adults under the age of 35) have a savings rate of negative 2%! When your define your corporate responsibility, it is also about creating synergy and having a razor sharp focus about what is important to you.
Sometimes there is conflict of interest among a portfolio of products. One of my students brought this up in my class and she was spot on. For example Dove promotes real beauty and the need to embrace yourself as you are. One of their commitments is Dove Self Esteem project which was started in 2004. I quote from their website: "Dove global research shows: Only 4% of women around the world consider themselves beautiful, and anxiety about appearance begins at an early age. 6 out of 10 girls are so concerned with the way they look, that they actually opt out of participating fully in daily life – from going swimming and playing sports, to visiting the doctor, going to school or even offering their opinions. At Dove we believe that women and girls of all ages should see beauty as a source of confidence, not anxiety. And when women and girls choose not to participate fully in life, society as a whole misses out. So we’re on a mission to help the next generation of women develop a positive relationship with the way they look - helping them raise their self-esteem and realize their full potential." Fantastic! Love this. But then another product of theirs is Fair & Lovely which focuses on becoming fairer to be more confident (interesting must read blog by Pradipti Jayaram) . Both are from the same company. Unilever has tried to counter balance this crticism with the Fair & Lovely Foundation which since 2003 till date has given 1000 scholarships.
2. Do you practice what you preach? Is your CR applicable closer to home?
Corporate responsibility starts at home – in your own company. This means your employees. Nestle has as part of its performance appraisal a feedback from subordinates called “Nestle’s Practice What you Preach” or “Walk the Talk”. This is better than a 360 feedback because it comes back to values. If your organization values recycling, as an employee or manger – do you? If you say your products are made from disadvantaged communities do you also work with them actively rather than just procure? Do you employ if feasible, the disadvantaged, intern employee children, champion women, commit to families etc? Research shows loyal employees are great brand ambassadors!
3. How deep is the impact with your communities?
During the Great 2011 Japan Earthquake and Tsunami, Toyota was faced with crippling costs and an impossible situation– further most parts for Toyota’s North American-built vehicles came from about 500 suppliers in Japan. Mr. Fujio Cho is the Chairman of the Toyota Motor Corporation and he addressed us in Nagoya shortly after. My respect for the company went up considerably as he announced how Toyota survived this difficult time – by managers taking a paycut (unheard of!), employees working on 50% salary to ensure their entire staff could be employed (not a single retrenchment!) and focussing on rebuilding supply chains and their community of suppliers whose businesses were destroyed by the tsunami. They succeeded in doing all this and more that year! (OK I know about recalls but that comes from chasing market share - another blog). Enriching communities is not just outward! This was the bottom up approach. One of Toyota’s guiding principles in times of crisis is “genchi genbutsu”, or “go and see.” As senior managers ideally it would be great to understand if your impact is superficial or deep, and more important if your business impact is positive and sustainable for communities you interact with.
4. Is your CR long-term focussed?
We can’t solve all the world’s problems. I think social responsibility is really about a long-term focus and being relevant. I'd recommend reading this great article by Michael Hobbes about the unintended negative consequences of doing good. Doing good means you are not creating a dependency, keeping your paradigm relevant to that place and culture and it means empowerment of the community you are targeting. Remember some change is generational and needs commitments of a lifetime. Also money is the easiest thing to give, much harder to give are your employees time, and skills. How committed as an organization are you? I love some of the work Aramex has been doing with Ruwwad. Fadi Ghandour, Founder Aramex and Ruwwad explains what they did with a marginalized community and how they also sparked entrepreneurship to create change. Amazing - but I love the fact that many champions and volunteers in the community come from Aramex. It took time to win trust with the community and Fadi was particular that the ownership for the projects needed to come from the community. Aramex CEO Hussein Hachem states “We are part of the fabric of society, we are on the ground, we are local.”
So next time you decide as part of CSR to sponsor a school, think how long do you want the kids to go to school? If you stopped the next year – do they have to stop? What was the purpose of sending them to school for one year? Wasn't that more cruel to let them experience something they cant experience again? Get involved as an organisation - your commitment to values means you live, breathe, and operate on these guiding principles.
Finally does your CR create ripples?
In a previous book I wrote about turning simple CSR activities into Corporate Community Engagement and Empowerment activities. Communities could be both internal and external. Engagement and Empowerment can look at people (individuals, societies, governments, industry, local – regional-worldwide) and environment (physical workplace, ecological, mental). Corporate Community Engagement and Empowerment metrics can be defined at following levels: (1) individual empowerment or collective empowerment (2) immediate impact or sustainable impact (3) behavior change or attitude change.
There is a need to look at engagement because to help at the community level you need to understand the challenges of the community and be able to come up with relevant solutions. Empowerment was important because if the goals were short term, in the long-term, we would no you won't be able to change attitudes. Behaviors are easily modified with incentives. Attitudes take education, but they will last long-term not only modifying behaviors for this generation but influencing the next. This requires corporate dedication. While financial metrics is important we still have no measures for corporate heart, and this will be the pulse or driver of change. Down with CSR – up with Corporate Community Engagement and Empowerment! Remember the ripple only begins from the point of impact and then spreads outwards!