It is safe to assume that in a down economy, belts are tight in corporate America. And while corporate social responsibility (CSR) continues to grow by leaps and bounds in relevance, thanks in large part to the many corporations who have made a name for themselves by being more responsible and more sustainable (i.e., Starbucks, HP, Coca-Cola), it is often seen as something “nice to do” but certainly not a priority. CSR professionals are often told, “Sounds good, but does it really make us more money?”
Now more than ever, it is critical to educate the C-suite about CSR, and also to help them see its many benefits. Every corporation’s CSR needs and approaches will differ; however, there are several universal lessons that can help maximize your chances of success:
1. Understand that there is more than one bottom line and get the C-suite to do the same;
2. Demonstrate the impact of CSR in laymen’s terms;
3. Take an army approach: pool resources to maximize impact;
4. Test the waters (pilot a campaign) before diving in;
5. Keep stakeholders updated every step of the way; and,
6. Repeat what works.
First, it is important to understand (and get the C-suite to understand) that there is more than one bottom line.
I recently attended a “green cities” conference where cities and corporations were abuzz with plans to become more sustainable and responsible. These are ambitious goals, which, on the surface, are not linked to profit. And, herein lies the problem.
In the 1990s British consultant John Elkington coined the term “Triple Bottom Line” (TBL) and defined it as “people (human capital), planet (natural capital) and profit.” It presents an alternative way to measure success and reflects a convergence of societal, ecological and corporate interests. TBL demands that environmental and social performance play a role when determining corporate “value,” not just profit.
While many in the public sector now rely on TBL as an actual accounting tool, among corporations it is still often seen as more aspirational, or as a strategic planning tool. Yet this is a step in the right direction. Even just beginning to examine how people, planet and profit all play a role in a company’s success is an important acknowledgement that CSR is critical to long-term success.
Many corporations and industries are much farther along in this process. United Airlines is a good example of commitment and action surrounding the TBL. In their recent corporate responsibility report, they reference the need to “forge strong relationships with the people and communities” they serve and detail how they use their resources to make an impact on business, environment and community.
Take the aluminum industry, as another example. Years ago, the industry that brings us, among other things, the aluminum can, watched the recycling rate of their number one product free fall. In the early 1990s, two out of every three cans sold were recycled, yet today the number is closer to one in two. Using recycled content to make new cans is 95% more energy efficient than mining and using new, raw materials, so this sharp decline has yielded significant environmental and economic impacts quickly felt in the C-suite.
You must find a way to connect the dots and do so in a way that the C-suite can understand. We understand that not every CSR effort will be a money saver, and there are certainly many other reasons why a community or corporation should take these steps, but it does help to try to connect the dots between doing what is right and doing what will save (or make) money. You will be successful if you can find a way to demonstrate how people and planet can actually play a role in boosting profit.
During the course of the aforementioned “green cities” conference, attendees revealed how they were able to sell the idea of sustainability to their stakeholders. (Inherent in the TBL concept is the value placed on stakeholders. They are not limited just to shareholders in a company, but rather a wider circle that includes society as a whole, and particularly those who are impacted by the actions of a company or community. To be truly sustainable, their needs must be embraced and addressed when making decisions and charting a path forward.)
Essentially, these communities had to learn, through a lot of trial and error, how to quantify and explain CSR in their community. By quantifying, in tangible terms, how a renewable energy plan, for example, will save, or better yet, make money in a community, Community X now had a ready and willing audience. If not, they had to get in line with every other community program (or department) that needed funding. Then, they had to learn how to explain the impact of their program in laymen’s terms to their elected officials and other stakeholders. Industry jargon, complicated graphs and charts depicting C02 emissions and climate change calculations, while meaningful to insiders, would only confuse and clutter their case.
Speaking Their Language
Basically, they had to learn to speak the language of their elected officials. The same can be said for the C-suite. Understand what drives them, is it strictly profit? Is it market share, PR benefits or technology? When describing a CSR opportunity to the chief marketing officer, you would take a very different approach than with say, the chief operating officer. One may care more about sales and share of voice, for example, while the other may care more about manpower implications and operational needs. All of these areas can benefit from CSR, but you must look at it from all of those angles and be prepared to speak to them when putting your case forward.
Back to the aluminum folks. They knew they had a problem and they knew they needed to address it by making sure they really understood its impact on the industry as a whole as well as on their individual companies. They began by researching and analyzing the many financial and environmental impacts of declining recycling rates, such as increased costs to mine raw materials, higher energy use in plants and added transportation costs, among others. They found a very clear line between reduced recycling among Americans and their profit bottom line. In short, lower recycling rate = bad for the environment = bad for costs = bad for profitability. They were then able to quantify the impact of even one rate point of recycling decline and demonstrate up the food chain how that affects them, in a very real way, enabling them to convince their executives to support and fund an industry-wide effort to increase recycling.
It takes an army: It is easier to find a solution and execute when you pool your resources. One corporation, acting alone, may not have the financial ability to make measurable strides in addressing critical issues, particularly ones with national or even global ramifications. An industry, or sub-set of an industry, on the other hand, may. In the case of the aluminum companies, they quickly realized they needed to join forces if they were going to make a significant impact.
Thus, they formed the Aluminum Can Council where companies with a stake in recycling could join forces, share costs and collectively make a true difference.
An added benefit of forming the Council was the credibility it brought their program. Instead of seeing it as one company’s CSR effort, stakeholders perceived it to be a united, industry initiative, and thus gave it more credence and attention. This army approach also made the effort more palatable to the individual companies (and their C-suites) who now are sharing in the risk, versus taking programs on independently. Through this newly formed Council, the industry was also able to thoroughly study the root causes of the problem through many different lenses, thanks to the diverse views of their members. Now, fully up-to-speed, they were able to agree upon a plan of action.
Test the waters before diving in.
It is human nature to want to get to the end goal quickly and see results now. However, with a CSR program, you must be conservative. You may have won over the C-suite by demonstrating the potential benefits of the effort, but you will lose favor in a snap if you cannot show them meaningful results.
It is for this reason that many corporations will pilot a CSR program before launching to the masses. We all know an idea or strategy may sound promising in a boardroom, but when executed, you may realize that you miscalculated. A pilot approach allows you to work out any kinks and determine whether the strategies being recommended are indeed effective.
In the case of the aluminum industry, they determined that a pilot program would be their first step. Research indicated that by helping communities better educate their residents about recycling programs; they could make a meaningful impact on recycling participation. But, they wanted to be sure. They selected three communities and launched education campaigns, and after a three-month test, they analyzed the results. To their delight, the campaigns were deemed to be effective, so they formalized their program, gave it a name and a brand, and began to market the effort nationally to other communities, and internally to their own companies. Now in its sixth year, the program has engaged over 23 communities and four states in effective recycling campaigns, growing recycling among partners by an average of 23%.
Keep the C-suite informed every step of the way
The C-suite can’t support what they don’t know about. Often, we fight hard up front for the chance (and the resources) to develop a program. But once the program is underway, we forget the need to keep stakeholders up to speed. And this includes the C-suite. While you may or may not have direct access to them for frequent updates, work hard to ensure they are updated (whether directly or indirectly).
In the case of the Aluminum Can Council, each participating aluminum company has a representative on the Council and this person’s responsibility, in addition to providing input and making decisions, was to report back to their company (and their senior executives) on progress made. This ensured that all stakeholders were knowledgeable and supportive.
Promote your successes in CSR to external audiences as well, and the C-suite will take note. A glowing story in a major business outlet about your CSR efforts can go a long way to persuading your executives that these efforts are paying dividends, both with reputation and with the TBL.
Repeat What works.
The old mantra of “if it ain’t broke, don’t try to fix it” rings true even today. We must resist the temptation to bounce around with our great ideas. Sure, you will need to refine and adapt as time passes, you would be a fool not to, but you do not need to re-create new programs if the current ones are working well.
Corporations spend a good deal of time, energy and money to make a CSR program effective. Learn from what works, as well as from what doesn’t. Adapt, but stay the course if your programs are bearing fruit. You will keep the C-suite engaged, supportive and in your corner if you focus on sustaining the momentum you have already gained, instead of coming to them every six months with a new idea.
Thankfully, CSR has taken on even more meaning of late as companies look to be even more cost-effective, responsible and transparent. CSR efforts can often be far less expensive but can also reap greater rewards than say, a pricy advertising campaign. You just have to make sure the C-suite sees it that way. By following these simple rules, you will be on the right track.
This article was written by Lena Davie, vice president of Hill & Knowlton, based in Tampa, Florida. It will appear in PR News upcoming Guide to Best Practices in Green PR and Corporate Social Responsibility, Volume 3. To find out more information about the book, please go to www.prnewsonline.com/store.