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Building a Winning Business — Leadership Blog — Tom Salonek

Tom Talks - Building a Winning Business  —  Leadership Blog  —  Tom Salonek

Can Business Save the World? Mistakes in CSR

Superman-Questions“Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend. But there is increasing pressure to dress up CSR (corporate social responsibility) as a business discipline and demand that every initiative deliver business results. That is asking too much of CSR and distracts from its main goal: to align a company’s social and environmental activities with its business purpose and values.” – “The Truth about CSR” by Kasturi Rangan, Lisa Chase and Sohel Karim (Harvard Business Review, Jan/Feb 2015).

This is the second in a series of posts on the proper role of business in society. Last time I shared my belief that subverting a for-profit business’s role from serving customers, supporting employees and making a fair profit to that of social engineering is a dangerous and slippery slope. Now I’d like to share some interesting findings from the article quoted above and to encourage other business people to weigh in on this topic too.

First some background about the HBR authors and the research behind their article. Kasturi Rangan is the Malcolm P. McNair Professor of Marketing at Harvard Business School and a co-founder and co-chair of the HBS Social Enterprise Initiative. Lisa Chase is a research associate at Harvard Business School and a freelance consultant. Sohel Karim is co-founder and the managing director of Socient Associates, a social enterprise consulting firm.

They conducted interviews with scores of managers, directors and CEOs during the past decade to learn how companies devise and executive CSR programs. Their findings included:

  • Many companies’ CSR initiatives are disparate and uncoordinated.
  • Most CRS initiatives are run by a variety of managers without the active engagement of the CEO.
  • Most firms are not maximizing their positive impact on the social and environmental systems in which they operate.

Not surprisingly, these CSR experts recommend that firms develop coherent CSR strategies. Specifically, they advise “dividing CSR activities among three theaters of practice: philanthropy, operational effectiveness and transforming the business model to create shared value.”

To make it happen, they advise four steps:

  1.  Pruning existing programs to align with the firm’s purpose and values
  2. Developing ways of measuring initiatives’ success
  3. Coordinating programs across theaters
  4. Creating an interdisciplinary management team to drive CSR strategy

In my next post I’ll share a bit more about what’s involved with these four steps.

Can Business Save the World?

Superman-Saving-the-WorldHave you noticed all the articles and blog posts lately about corporate responsibility, sustainability, philanthropy and ethics? I was especially intrigued by a post on Fortune magazine’s website by author Rob Asghar about the 2015 Oslo Business for Peace Summit and a subsequent Business for Peace award ceremony.

Asghar writes that the participants “described a new, urgent corporate pragmatism that goes beyond idealism or kind intentions. . .Within a global society increasingly vexed by income inequality, conflict and environmental challenges. . . participants argued that the only smart long-term business move is to demonstrate a tangible commitment to the larger good.”

He also reports that “proponents of the ‘business for peace’ approach argue that the future opportunities are breath-taking for those companies that seek the larger good in meaningful, demonstrable ways. But they also argue that this will require a shift from corporate social responsibility being a discrete corporate department to becoming the very DNA of an organization. Enlightened self-interest, they argue, will be pragmatic, urgent…and very profitable.”

Whatever happened to providing needed goods and services, being a great employer and giving back to the community as much as possible? I view my primary business responsibility as taking good care of employees and customers, first and foremost. I’m not sure “corporate social responsibility” needs to become part of “the very DNA” of Intertech or other for-profit businesses either.

I’m certainly not proposing a return to the robber baron era, but I do believe running a responsible profit-making business is a noble calling in its own right. Whether your business is helping to feed people, like the family farm I grew up on, or developing software to help other businesses serve their customers better, it’s important to believe in the integrity and clarity of your mission.

Earlier this year, Harvard Business Review (Jan-Feb. 2015) shared an article about balancing corporate social responsibility (CSR) with overall business goals. That article, “The Truth about CSR,” had a refreshingly down-to-earth message: “Most (CSR) programs aren’t strategic—and that’s ok.”

I’ll tell you more about that next time.

6 New(er) Drivers of Growth

6-Drivers-for-GrowthThere was an interesting article on Inc.com titled “Up Next: The Greatest Era of Entrepreneurship and Small Business The World Has Ever Seen“.  It points out six trends that will drive growth and entrepreneurship:

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  1. Micro-entrepreneurs.  If you’ve sold on eBay, Craigslist, or Etsy, used Uber or Airbnb, or used a service like TaskRabbit, you’ve experienced micro-entrepreneurship.  Some estimates state there are as many as 15 million micro-entrepreneurs
  2. 3D printing:   3D printing redefines what it means to be a manufacturer.  The article shares the story of a teen who made a prosthetic arm for a few hundred dollars (vs. $50K)
  3. Crowdfunding.  To date sites like Kickstarter, have raised $3,000,000,000+. With crowd funding, capital is available to all.
  4. Free failure:  Between micro-entrepreneurship platforms, crowd funding, and free or inexpensive hosting and cloud-based platforms, the cost to try is almost zero.
  5. Boomers:  By 2030, there will be 70M people over 65 and a lot of them will keep working.
  6. Internet for all:  Today, 2B have access.  In 10 years, most of the world will have access.  That’s 5B more connected customers and companies.

 

Asking for Support to Get Things Done

VotingIf you need cooperation on something, ask for support before you go public. People want to follow thru on commitments.

In 1987, a social scientist named Anthony Greenwald asked voters on election-day eve if they’d vote.

100% said yes.

On election day, 86.7% of those asked went to the polls compared to 61.5% of those in the “control group” who were not asked.