Really Strategic CSR Part II

What is Really Strategic CSR?

So what does Really Strategic CSR look like? First let’s look at what it is not:

• Governed by linear thinking and analysis
• Reductionist in scope
• Short-term in it’s orientation
• For the benefit of the corporation and the cause only
• Undisciplined support of multiple causes unrelated to the corporation’s strategic interests
• Reactionary

Really Strategic CSR is:

• Governed by systemic thinking & understanding of non-linear dynamics
• Informed by eco-systemic realities & relationships
• Taking a holistic and collaborative approach to being socially responsible
• Understanding the part from the whole and acting accordingly
• Treating CSR as a targeted intervention into complex open systems
• Visionary 

Really Strategic CSR emerges from the understanding that corporations need to intervene cooperatively and collaboratively to create sustainable global market stability and growth. The major problems facing (or soon to be facing) global business are deep fissures in the foundations of global commerce. According to Lester Brown’s Plan B 3.0 these include:

• Deteriorating Oil and Food Security
• Global Warming & Rising Sea Levels
• Emerging Water Shortages
• Deteriorating Eco-systemic Resilience
• Poor Urban Planning & Poverty
• Energy Inefficiency & Waste

Simply, if we do not begin to collaborate on some truly innovative, very disciplined and exceptionally non-partisan interventions to address these issues, the havoc that their convergence will wreak on global business, global security and stability will be overwhelmingly immense. I will leave the gloom and doom predictions to others. Suffice to say that things could get very, very bad.

However, if we can begin to move into a space of open collaboration and a paradigm arising from an understanding of systemic inter-relationship we open our selves (individual and organizational) to a new level of Social Responsibility in which we perceive, think and act “glocally” (simultaneously global and local). 

It’s a big step. It requires the desire to change and evolve our capacity to perceive, think and act. It’s not just going to happen. We have to be change to enact the change. No excuses. No rationalizations. And as a mentor of mine used to say, here’s the trash can: leave your ego there. There’s no room for it here.

 

Tags: corporate social responsibility, csr, sustainability

Recent Takes on CSR

Some other opinions on CSR that surfaced in response to the Porter/Kramer CSR article cited in Truly Strategic CSR Part I:

Jessica Margolin at Solvation:

I actually feel this framework doesn’t go quite far enough…it *seems* they’re saying that there needs to be collaboration across the boundary or in the interface between firm and non-firm.  In contrast, I’m saying that the concept of externalities is outmoded now that we can model complex systems, and a new model needs to be developed that treats firms, community groups, etc. — down to the individual level — as actors in a larger topology.

John Elkington

And the future of CSR? Well, I totally agree with the point that ‘broad, unfocused support of multiple causes’ – often viewed as an example of corporate responsibility and good citizenship – “has little impact.”

Victoria Erhart at Blogging Stocks

Porter and Kramer argue that strategic corporate social responsibility responses must create shared value for both the company and society simultaneously. A company must focus on a small number of large impact initiatives integral to its own core operations. Management must measure potential social rather than stakeholder satisfaction. Generic social do-good programs do not have a measurable long-term impact on either the company’s competitive position or the health of the society.

Mark Kramer at the HBS Conversation Starter

Although social issues are indeed the purview of government, in reality, global corporations are creating a de facto set of international standards that collectively rise above the social obligations imposed by any one government – and to compete in the global economy, companies are finding that they must abide by this emerging code of conduct.

Bob Langert from McDonald’s

I noticed a lack of perspective from the business side in this article [review of Robert Reich's book, Supercapitalism in the Economist]. Let me provide my point of view. I couldn’t agree with Simon Zadek, the head of Accountability, more when he says in the article that it is not what or why; it’s all about how to do it. Doing it in a way that jives with the business – in our case McDonald’s and the food service industry – and with what is good for society. There is a robust “to do” list at this intersection for any business.

The Thinking Shift Blog

So I was pleased to come across an article in the Harvard Business Review by Michael Porter & Mark Kramer that talks about strategic CSR. I particularly like the framework they articulate that includes “inside-out linkages” and “outside-in linkages”.

Without specifically talking about an ecosystem model, Porter & Kramer see CSR as an opportunity rather than a cost because there are points of intersection between a company and society. If these intersection points are identified, then the company can work out a value proposition that is unique for its customers.

Tags: corporate social responsibility, csr, sustainability

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