All Posts Tagged With: "corporate social responsibility"
Porter: CSR Is Dead End
In an interview on HBR.org, management expert, author, and Harvard professor Michael Porter said that CSR (corporate social responsibility) is a dead end. “For folks in the CSR world,” he added, “the real impact isn’t on charitable giving but mobilizing the business itself.” (video and article available here)
Porter and partner Mark Kramer argue for a principle they label “shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress.” As they see it, “shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.”
It’s not exactly a catchy name, nor is it a new concept, but if Porter and Kramer can get more companies to focus on the needs and challenges of society—rather than creating a demand for something we don’t really need—they will help CSR move to the next phase.
I would call that next phase corporate social profitability (CSP), since both companies and society benefit.
If you want to know what CSP looks like, consider the case of Dannon yogurt in Bangladesh, which I wrote about here. Danone teamed up with Grameen Bank to develop a low-cost yogurt that provides 30% of a Bangladeshi child’s recommended daily nutrients. It created economic value by creating value for society.
Or how about Procter & Gamble, which now has nine manufacturing plants that are…
24Mar2011 | Steve George | 1 comment | ContinuedStrategic Value of Corporate Social Responsibility
The evolution of corporate social responsibility from charity to strategy is one of the great business stories of the past decade. The leaders in CSR are finding ways to enter new markets that seemed undesirable and impenetrable. It takes longer, the profit margins are smaller, and the challenges are greater, but the payoff, both for the company and its customers, is huge.
Pamela Hawley describes these benefits in her article on Fast Company about Danone and Grameen Bank in Bangladesh (“Corporate Social Responsibility: How You Can Profit – and Kick Poverty Out,” March 4, 2011). Grameen Bank pretty much invented microfinancing as a way of lending small amounts of money to those who had little, primarily women. Danone makes yogurt.
Danone wanted to enter the Bangladesh market so it partnered with Grameen to create a unique, community-based model. “Those of us who are involved in CSR know we need to have experts on the ground,” Hawley writes. “It’s important to establish local buy-in, which can take years of relationship building. And we need to have experience, or rely on those who do.”
The annual income of a Bangladeshi is $497. The country has one of the highest child and maternal malnutrition rates in the world. One cup of Danone yogurt would provide 30% of a child’s recommended daily nutrients.
Grameen Danone Foods Ltd. built a production plant near Bogra, Bangladesh. It branded the yogurt as “shokti,” which means strength in Bengali.…
7Mar2011 | Steve George | 0 comments | ContinuedCorporate Social Responsibility in 2010
Corporate social responsibility (CSR) continues to gain momentum among a wide range of people from customers to employees to senior leaders. More organizations are seeking more systematic ways to answer a Baldrige Criteria question: How do you contribute to the well-being of your environmental, social, and economic systems?
FastCompany expert blogger Alice Korngold follows the CSR story. She identified four CSR trends in 2010 (“The Year in CSR: The Four Trends of 2010,” December 21, 2010):
1. Leadership matters. Korngold talks about the annual September meeting of the Clinton Global Initiative at which “scores of CEOs from global corporations” reported “on the completion of previous years’ multimillion dollar commitments and made new commitments to address global social, economic, and environmental challenges.” These are not tree-hugging dreamers but the kind of visionary leaders Baldrige applauds. “Corporate leaders with vision are recognizing that by advancing global solutions, they can create valuable renewable resources to their advantage, establish new markets for their companies, and otherwise unleash tremendous opportunities,” she writes.
2. Consumers care. According to the 2010 Cone Shared Responsibility Study, 84% of Americans believe their ideas can help companies create products and services that are a win for consumers, business, and society, but only half (53%) feel companies are effectively encouraging them to speak up on corporate social and environmental practices and products. The study also observed that “Americans hold companies accountable for a range of global issues that may impact their businesses.”
3. Measurement…
23Dec2010 | Steve George | 0 comments | ContinuedP&G Sets High Bar for Environmental Responsibility
The Baldrige Criteria ask how you contribute to the well-being of your environmental system. A lot of organizations tout their recycling programs as evidence of environmental responsibility, but Procter & Gamble has set a much higher bar: zero waste sent to landfills.
This week, P&G announced that its ninth manufacturing plant—and its first in North America—earned the distinction of beneficially using 100% of its waste, with more than 60% recycled or reused and the rest converted to energy.
P&G’s vision is to have zero manufacturing waste going to landfills from any of its plants anywhere in the world. It is moving toward that vision through its Global Asset Recovery Purchases (GARP) program, which uses internal innovation and external partnerships to help plants reach the zero waste goal. In the case of the latest plant, a feminine care facility in Auburn, Maine, the GARP team partnered with a provider to sort recyclable materials and convert non-recyclable materials to energy through incineration. The electricity from the incineration is used by the incineration facility with the excess sold to the local power company. According to P&G, in the last year “the GARP team has diverted tens of thousands of tons from landfills while delivering tens of millions of dollars in cost recover to the company” (“P&G Announces Its First North American Manufacturing Plant to Achieve Zero Waste to Landfill,” IW Staff, IndustryWeek, December 6, 2010).
To read more about Baldrige and the…
7Dec2010 | Steve George | 0 comments | ContinuedFirms of Endearment
That’s the title of a 2007 book by Rajendra Sisodia, David Wolfe, and Jagdish Sheth. By their definition, a firm of endearment (FoE) “is a company that endears itself to stakeholders by bringing the interests of all stakeholder groups into strategic alignment.” The authors identified FoEs and tracked their stock performance over the previous ten years: The publicly-traded FoEs returned 750% over that time while the S&P returned 128%. In the latest five years, the FoEs returned 205% while the S&P lost 13%. As the authors note with the first sentence in the first chapter: “This book is not about corporate social responsibility. It is about sound business management.”
Creating and balancing value for all stakeholders is a Baldrige expectation. It requires identifying your key stakeholder groups, understanding each group’s key requirements, and developing strategies and plans that meet and exceed the requirements of all stakeholder groups.
“Stakeholders are part of a complex network of interests that function in a matrix of interdependencies,” the FoE authors write. “We argue that each stakeholder tends to thrive best when all stakeholders thrive. No stakeholder group is more important than any other. To see matters otherwise is like saying the heart is more important than the lungs. Life depends on both being healthy. It is disciplined dedication to the well-being of all stakeholders that separates firms of endearment from their competition.”
The book is organized around five major stakeholder groups: customers,…
9Nov2010 | Steve George | 0 comments | ContinuedThe New Pro-Business Mentality
There are a lot of politicians hitting the airwaves with their “pro-business” mantra that usually includes reducing regulations, eliminating the minimum wage, and cutting corporate taxes. But, as Seth Godin so eloquently points out, what may have been pro-business in the past has little to do with what is best for business in the 21st century. (“What does ‘pro-business’ mean?” Seth Godin’s Blog, October 13, 2010)
That old-school pro-business mindset is more like pro-factory, but factories in the U.S. business world represent a fraction of all the business that’s being done, especially since so many factory jobs have been sent overseas. “It turns out that factory thinking is part of a race to the bottom,” writes Godin, “to be the cheapest, the easiest place to pollute, the workforce that will take what it can get.”
Godin offers a new set of pro-business strategies that sound like a much better fit for business today:
- “Investing in training the workforce to solve interesting problems so they can work at just about any job.
- Maintaining infrastructure, safety, and civil rights so we can create a community where talented people and the entrepreneurs who hire them (two groups that can live wherever they choose) would choose to live there.
- Rewarding and celebrating the scientific process that leads to scalable breakthroughs, productivity, and a stable path to the future.
- Spending community (our) money on services and infrastructure that help successful organizations and families thrive.”
This is not a Chamber…
14Oct2010 | Steve George | 0 comments | ContinuedAdverse Impact on Food Safety
The Baldrige Criteria ask: How do you address any adverse impacts on society of your products and operations?
The question seems particularly relevant in the wake of the recent egg recall, which followed high-profile problems with lettuce, peanuts, spinach, and peppers. When it comes to the potential for adverse impacts on society, food safety ranks right at the top—which makes the behavior of many in the food industry appalling.
“The food industry is jeopardizing U.S. public health by withholding information from federal food-safety investigators or pressuring regulators to withdraw or alter policies designed to protect consumers,” stated a recent article in Reuters. (“Industry Sway Endangers U.S. Food Safety,” Reuters, September 15, 2010)
The Union of Concerned Scientists sent a survey to about 8,000 people working on food safety at the FDA and the USDA. About 1,700 responded, with 60% identifying themselves as inspectors. One-fourth of the respondents had “seen corporate interests force their agency to withdraw or modify a policy or action designed to protect consumers during the past year.” Not during their careers as inspectors but just in the last year.
Thirty-eight percent said that “public health has been harmed by agency practices that defer to business interests.” Nearly a third mentioned one reason these agencies defer to business interests: The people making the decisions used to work for the food or agriculture industries.
The article quotes Dean Wyatt, a USDA veterinarian who oversees federal slaughterhouse inspectors: “Upper-level management…
29Sep2010 | Steve George | 0 comments | Continued
