All Posts Tagged With: "csr"
Purpose-Inspired Growth, Part 2
In 1970, Milton Friedman wrote “that a corporation’s only moral responsibility was to increase shareholder profits.” The article that quotes him suggests that a majority of people disagree with his opinion (“The Responsibility Revolution” by Richard Stengel, Time, September 21, 2009), and that “purpose-inspired growth,” which the Baldrige Criteria encourages with questions about social responsibilities, is fast gaining momentum.
According to the article, six in ten Americans have bought organic products so far in 2009. Of a thousand people polled, 82% have consciously supported local or neighborhood businesses this year and nearly 40% bought a product in 2009 “because they liked the social or political values of the company that produced it.” Socially responsible investment mutual funds “now manage about 11% of all the money invested in U.S. financial markets.” A 2007 survey by Goldman Sachs revealed that “companies with a strong emphasis on sustainability outperformed the market, often by a large margin.”
Even Wal-Mart, the bane of local and neighborhood businesses, is fiddling with social responsibility: “It is developing a sustainability index that will one day show consumers at a glance how green its products are.”
Cynics would argue that Wal-Mart is only boarding the environmental bandwagon to make money. Geoffrey Heal, a Columbia Business School professor says: So what? “I don’t care whether companies change for the love of the environment or because of their financial interest,” he says. “The most sustainable solution is to have companies responding to financial incentives rather than their own feelings.”
Friedman may have been right about a…
21Sep2009 | Steve George | 0 comments | ContinuedPurpose-Inspired Growth
It’s only a matter of time before corporate social responsibility (CSR) regularly appears in Baldrige applications as a key success factor that differentiates a company from its competitors. It’s the direction a host of companies are taking not because they are suddenly altruistic, but because it makes good business sense.
In The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits (Pearson Education, 2006), C.K. Prahalad presents case studies of a dozen companies that have been profitable serving the “bottom of the pyramid,” the four billion people who live on less than $2 a day. In Capitalism at the Crossroads: Aligning Business, Earth, and Humanity (Pearson Education, 2007), Stuart L. Hart writes, “Recognizing global sustainability as a catalyst for new business development will prove increasingly important to corporate survival in the twenty-first century—the proverbial crossroads to the future.”
To show how mainstream such thinking has become, consider Procter & Gamble. Its new CEO has been busily promoting the company’s “purpose-inspired growth” strategy. Rosabeth Moss Kanter describes CEO Bob McDonald’s road show in “Inside Procter & Gamble’s New Values-Based Strategy” (Harvard Business Publishing, September 14, 2009). “McDonald calls P&G’s purpose the most consistent factor in a 171-year history of growth,” she writes, describing how the company developed a razor-and-blade innovation to reach lower income shavers in India and basic products for poor markets in Brazil. “The business in Brazil became a profitable global growth model,” Kanter states, “and not just for emerging countries. Tide Basic was recently introduced in the U.S.”
The Brazil…
18Sep2009 | Steve George | 0 comments | ContinuedThe Most Popular Improvement Tools
The list comes from the Global Benchmarking Network’s 2008 survey on business improvement and benchmarking. Which of these does your organization use?
- Mission and vision statement
- Customer/client surveys
- SWOT (Strengths/Weaknesses/Opportunities/Threats)
- Informal benchmarking (encouraging employees to learn from other organizations)
- Quality management system (think ISO)
- Improvement teams
- Employee suggestion scheme
- PDCA (Plan-Do-Check-Act)
- Performance benchmarking (comparing process/activity performance levels)
- Knowledge management
- Business process reengineering
- Balanced scorecard
- TQM (total quality management)
- Business excellence (using Baldrige, EFQM, or other national excellence models)
- Best practice benchmarking (structured process for comparing performance and implementing best practices)
- Corporate social responsibility system
- Lean
- Industrial housekeeping (5S)
- Quality function deployment (QFD)
- Six Sigma
More than 450 responses from 44 countries ranked their organizations’ usage of these improvement tools in the order above. The percent of usage ranged from 77% for “mission and vision statement” to 22% for Six Sigma. Every tool from the top through PDCA was used by more than half the respondents; the rest were used by fewer than half.
The Baldrige message is a good news/bad news deal: “Business excellence” is currently being used by just 40% of the respondents, which is pretty good considering that only 59% said they understood what the “business excellence” tool is.
You can read a summary of the survey here.
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Corporate Social Responsibility
A new book by Harvard professor Rosabeth Moss Kanter comes out this month. SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good is the result of more than three years of research at 15 companies. We’ll review the book as soon as it’s available.
Early word is that the book links social good to financial success. That’s not a universally accepted notion, but it is a growing one.
Corporate social responsibility, or CSR, is invading more and more boardrooms and executive meetings as businesses wrestle with what and how much to do to (a) improve their image, (b) act more ethically, and (c) support their communities. The ongoing litany of ethically-bankrupt companies, whether in energy, real estate, financial services, or other, less obvious, industries, makes good behavior a competitive advantage. New generations of workers demand social consciousness from their employers or they’ll look for work elsewhere. Social stock exchanges are springing up or being developed to support those companies that behave responsibly while serving the social good.
“Societal responsibility” is one of eleven Baldrige core values. The Leadership Category of the Baldrige Criteria asks key questions on this subject including:
- How do you promote and assure ethical behavior in all your interactions?
- How do you consider societal well-being and benefit as part of your strategy and daily operations?
- How do you actively support and strengthen your key communities?
It’s no longer enough to support the employee bowling team and give to the United Way. Role-model companies are weaving CSR into their strategic plans, balanced scorecards, and…
3Aug2009 | Steve George | 0 comments | Continued
