It's all over the news, from high-profile testimony before Congress to dedicated features in business magazines: corporate social responsibility, corporate responsibility, corporate citizenship, sustainable business practices - no matter which term you prefer, these buzz concepts are alive and kicking - hard. No longer is it a concern solely for NGOs, nonprofits or do-gooders; now practicing socially responsible business is a key driver for corporate reputation and strong financial performance.
Plus, key senior executives are taking note. Case in point: On April 12-13, the Arthur W. Page Society held its annual spring seminar in New York City, and it departed from its two-year running digital/new media theme for something a bit "greener:" "Prove It with Action: The Case for Improving Business Performance by Improving Society." The program offered a number of insightful presentations - from "The Mainstreaming of Corporate Citizenship" to "Listening to Stakeholders" - but a common theme quickly emerged: Integrating CSR into every aspect of business and organizational practices is a key driver for financial and reputational success. It's just a matter of doing it right.
Perhaps the best roadmap for integration was offered by Christopher Pinney, director, executive education, The Center for Corporate Citizenship, Carroll School of Management, Boston College. He represented his organization in a panel titled "The Buck Stops Where? A discussion about the hard data to support the business case for private sector involvement in societal issues," but it was the Center's research report - "Integration: Critical Link for Corporate Success" - that hit the nail on the head, offering a streamlined approach for integrating, aligning and institutionalizing corporate citizenship strategies. (See sidebar.)
Between the integration report and the wealth of information generated in the Spring Seminar's panels, here is a fool-proof approach for integrating CSR into organizational structures and stakeholder conversations for the betterment of business performance - and society.
Use the company's reputation as a compass. According to the Center for Corporate Citizenship report, "Though difficult to quantify, reputation is widely recognized by executives to be a central asset to a company's value, and many corporate citizenship practitioners are using this external force as an internal motivator." One of the report's interview subjects - Gene Endicott, public affairs director of Agilent Technologies - reinforced this point by noting the growing web of cross-functional initiatives, with corporate citizenship initiatives being the point of connection - hence, integration:
"I'm starting to see corporate citizenship show up in more of the sales and marketing materials," said Endicott. "Similarly, our brand management folks - who drive our corporate advertising - have also shown a real willingness and interest in highlighting corporate citizenship as part of our overall advertising ... it's an example of how, over time, this concerted effort starts to permeate."
Past studies support the role reputation should play in strategic decision-making. Hill & Knowlton's "Return on Reputation: Reputation Watch 2006," a global survey of financial analysts' opinions on corporate reputation management, made this proclamation: "Clearing the aftermath of a series of high-profile scandals that have irreversibly changed the corporate landscape, we now live in a business world where perception is valued as much as performance and profit." This statement underscores the changing role corporate communicators play in the organization, as their responsibilities directly link to corporate reputation and public perception.
Engage all constituents, especially employees, consumers and stakeholders, but expect disparate attitudes and behaviors. "In the world of CSR, it's not something you do to make the other stuff go away. You can't use it to whitewash something else," said Mike McCurry, partner, Public Strategies Washington, during the "Listening to Stakeholders" presentation. "The more activism you see, the more important it is to keep within the current context. Do it from the inside out. Start with employees."
Art Ryan, chairman and CEO of Prudential Financial, gave a speech at the Seminar in which he highlighted a few best practices for engaging employees in CSR initiatives throughout the organization:
- Ask them what they care about, not what the business cares about. Empowering employees to engage with consumers also reduces turnover because employees want to be part of something bigger;
- Recognize employees who do exemplary work in the CSR space; and
- Look for a way to connect employee interests with business interests.
As far as handling shareholders, Ryan had this to say: "10% are all for it [socially responsible investing], 10% are completely against it, and 80% don't say a word - that's the number that is most worrisome." To handle those residing in no-man's land, consider these tips:
- Build their understanding of the initiative in the context of the business;
- Identify specific opportunities for corporate citizenship within each business unit; and
- Identify senior-level allies who support the program as a strategic business investment.
But it's not always a cut-and-dried issue of incorporating CSR into business practices and having an easy, breezy response from all constituents. Chris Meyer, vice president of external affairs, Consumers Union, added this to the mix: "Consumers do care about CSR, but investors want a bottom-line return. Employees want good pay and job security. Consumers want affordable, high quality and accessible products. That's how you build loyalty. When the rubber hits the road, sometimes values are dissonant with costs."
Use your organizational structure to your advantage. Creating formal and informal cross-functional groups whose specific shared focus is corporate responsibility helps embed the CSR culture in different departments throughout the organization. Rather than "reinventing the wheel," use the structures and functions that are already in place to lessen resistance.
"The question for CEOs is no longer why - it's how," Pinney says. "The only way to manage CSR is across the business."
Another way to facilitate cross-departmental cooperation: Create a sustainability/citizenship report based on input from all constituents to inform everyone about the performance and strategy. Requiring input from different departments naturally integrates efforts, as deadlines and tangible "assignments" mandate participation.
At the end of day two of the Page meeting, there was no clear-cut means of completely integrating corporate citizenship into all business strategies, but the beacon of hope burned bright.
CEOs are onboard; executives are behind the initiatives; and, of course, communicators are maintaining the momentum that's necessary to create strategic impacts.
"Expectations are changing," said Marc Gunther, senior writer for Fortune magazine and moderator of "The Buck Stops Where?" panel. "They are only going in one direction. Up."
Taking Strategic Action
Alignment Strategies
- Create a coherent context for corporate citizenship
- Communications strategies
- Structural strategies
- Generate consensus on name, scope and boundaries
Integration Strategies
- Leverage existing systems, processes and structures
- Leverage reporting of key non-financial issues
- Bring the outside in
- Establish a formal corporate citizenship position
- Focus on pockets of excellence
Institutionalizing Strategies
- Build and demonstrate the business case
- Obtain support of CEO and company leaders
Source: The Center for Corporate Citizenship at Boston College, "Integration: Critical Link for Corporate Citizenship."