Truly Strategic CSR Part I

CSR (Corporate Social Responsibility) takes many forms with many aims and applications. Some corporations merely and cynically “greenwash”, others sincerely try to be “green” but only reach the level of seeking out and supporting random or thematically connected NPO’s or social welfare causes. Still other companies are trying to embed a spirit of philanthropy or social responsibility by creating giving programs for employees who are able to select their favorite causes and apply corporate sponsored points that are then converted to funds for their the causes of their choice. There are some nifty dashboards I’ve seen in operation that manage these point systems. Unfortunately, those all of the approaches may do some good, even taken in their aggregate effect, they contribute little to long-term sustainability.

 

Understanding the Parts and the Whole

Michael Porter and Mark Kramer argue in their 2006 Harvard Business Review article, “The Link Between Competitive Advantage and Corporate Responsibility” that companies need to take both a holistic and highly targeted approach to their activities. This is accomplished by mapping the entire value chain with an eye on points of intersection they call “inside-out linkages”. However to balance that viewpoint an “outside-in” perspective must also be developed. That perspective looks at outside social influences on competitiveness.

While I whole-heartedly agree that the two activities are essential in understanding the systemic contexts in which a business operates, those perspectives are not enough for two reasons. One is the context that Porter and Kramer put forth is largely social in nature. Using a Pareto approach, let’s say this covers roughly 80% of the operating context. What is the remaining 20%? The remaining 20% is the context in which the social itself is embedded: the eco-systems and supporting relationships that sustain life. To be engaged in any meaningful way, these systems and relationships cannot be reduced and must be viewed in their wholeness. Further, if these support systems begin to fail, societies will fail with them.

The second reason is scope. Scope has two parts. The first is the criteria for choosing CSR strategy. To quote from the article:

Typically the more closely tied a social issue is to a company’s business, the greater the opportunity to leverage the firm’s resources-and benefit society.

Although the above is true and makes good short term business sense, it tends to be exactly that: short term in it’s focus, application and effect. In other words, by choosing the “social issue of the moment” or taking a low hanging fruit approach, corporations will continue to do harm by doing good. Think of it as planting flowers on the beach at low tide. All that money, time, goodwill and effort squandered for six hours of beauty. It feels good, looks good and makes great performance art. ‘Nuff said.

The second aspect of scope is that the Porter and Kramer model is still governed by the corporation as a self-governing, autonomous entity. Essentially, they are asking corporations to act from an enhanced sense of enlightened self interest. The issue here is that the corporate sense of self is still often restricted to unsustainable quarterly earnings requirements, mechanistic, bottom line thinking. Though the corporate heart may be in the right place, the corporate head is clouded by the pernicious myopia that is bringing the world to some very dangerous tipping points. The image of Nero fiddling while Rome burns comes to mind.

 

Toward a Benevolent Net of Sustainable Practice

If we want to get truly strategic around CSR, the first and biggest step is to realize that we are not in this alone. Although we may be competing for market share and consumer interest, it is in our best interest to work together to create long-term systemic health in the markets in which we operate. The goal not being subsistence but instead to flourish. Simply, long term thriving and healthy markets rest on a healthy and thriving web of life.

In reality it is a return to the dilemma of the Tragedy of the Commons. Do we get what we can while the getting is good or do we manage the commons in a way that allows all beings to benefit (and share their benefits through increased consumer spending!). The commons, now though, is not a pastoral village green. The commons, now, are the oceans, our combined capabilities to grow and transport food, our access to water and living assets that allow economic endeavors to take root, grow and enrich local, regional and even global prosperity.

Part II of this post will take a practical look at what that net of sustainable practice would look like and some practical first steps for making the shift from our current paradigm.

 

 

Tags: capacity evolution, corporate social responsibility, csr, sustainability