Corporate Social Responsibility

In all the coverage of General Motors’ problems in recent days, we haven’t seen much about the company’s record of social responsibility. With all the issues of debt, the health-care burden carried by the company, and its difficulties in a crowded supplier market, social responsibility concerns often fade into the background.

Interestingly, though, at least one voice has risen up in praise and appreciation of GM. The Washington Informer, and presumably other African American newspapers, carried an article today by William Reed of Black Press International. Reed calls attention to the long history of GM in working with, employing and supporting African Americans and indeed black people in many parts of the world, including South Africa.

Reed points out that in 1971, GM appointed the first African American to the board of a Fortune 500 company. That appointee, the Rev. Leon Sullivan, became internationally famous for developing the Sullivan Principles, which challenged U.S. companies with operations in South Africa to treat their black employees equitably and fairly. At the time, GM was the largest U.S. employer in South Africa. GM followed the principles in South Africa, and eventually 125 U.S. companies within operations in the African nation followed suit.

Of the companies that adopted the principles, at least 100 withdrew from South Africa as it became apparent that the government would not readily change its apartheid policies of segregation and discrimination. Certainly the economic blow of having so many companies leave contributed to the eventual overturn of these policies. GM and Rev. Sullivan were squarely in a leadership role on the issue.

In his article, Reed also lauds GM for other initiatives:

“It was GM that provided buses to transport people to the Poor Peoples’ March on Washington. Since the early 1970s, well ahead of other companies, General Motors has gone the extra mile to make sure the American dream was achievable for all Americans. Under the guidance of Sullivan, in 1972 GM became the first auto company to launch minority dealer and minority supplier initiatives. It spent $2.5 billion with people of color and women-owned suppliers in the U.S., and had full-time management focused on supplier diversity.”

Reed calls upon African Americans to rally behind this company as it emerges from bankruptcy and seeks a new competitive footing. If this happens, GM could realize a substantial reward for all the good work it has done over the years. For those who doubt the importance of building strong relationships through responsible action, perhaps this will be a lesson.

Peter Faur, RightPoint Communications Inc.

Recently the news media was all a twitter about billionaire movers and shakers getting together to discuss the increasing need for philanthropy in the U.S. and abroad. Bill and Melinda Gates, Oprah Winfrey and Warren Buffet were alleged to be attending the secretive meetings. Personally, I was heartened to learn that humanity was top of mind for global leaders because if there ever was a time to lead and address need, certainly, that time is now.

We are the ones we’ve been waiting for.

If your organization has been sitting on the side lines waiting for a better time, a better place, it’s time to move off the fence. Starting a community based program (aka corporate philanthropy program) would be a good place to start. If enough companies birthed mini-versions of Buffet and Winfrey-like programs, the world would be a vastly different place. Why not start now?

To get started, I’ve outlined five simple D’s to create an A-level program that would do any company proud. To begin:

Define your company’s purpose for the program. Start by asking and surveying employees: what do we want to accomplish? What should the purpose be for the program? What value can the organization uniquely bring to the world/state/region/city that would make a difference? What needs should be addressed? Where we can be of value? What matters most to us? Then whittle the ideas down to the top 5 or 10 for consideration and exploration.

Discover your passion. Once you’ve defined what matters most to your employees, discover all you can about each need or topic. Ask employees to discover: who currently addresses this need? Can we collaborate with them? Ask them to discover what programs are addressing these needs and why they are successful? Have them talk to groups about their experiences. Inquire about their strengths. Their successes. What worked? Why it worked and how it worked? What did they learn from this experience? What did they value most? What value to do they continue to bring to this need? Stay away from weaknesses. Focus solely on strengths-based results. Only by understanding what works and why it works can we mirror and replicate success…Choose to focus on creating success with your program.

Dream your passions into life. Now that you have a handle on what you wish to create, dream about it. Imagine the answer to this question: It’s five years out and the New York Times is interviewing your company for a story about your corporate philanthropy program. What successes would you play up? What successes were most important to you? How did you make a difference? Where did you address the greatest need? How did you do that? What was most effective? Play with these questions in your mind…Consider: What if we …..? Imagine if we….? How could we? Dream big. Let your imagination lead the way. When we dream, we shift our minds from limitation-based thinking to the unknown where we can freely explore new avenues of possibility. Play with your dreams and see what forms. Then follow your company’s heart to the place that resonates best with your organization’s voice and mission.

Design a successful process. Once you have your dream established, it’s time to design a system to implement and execute to it. Take your dream and make it real by putting a foundation to it and processes in place. Make it real and tangible. Let your employees determine the processes and foundations. Invite collaboration and knowledge sharing. When employees are invited to participate in ventures that matter to them, productivity, morale and success increases exponentially.

Deliver a program that makes a difference in the world.  Implement your vision with the utmost compassion and of course, passion. Once your organization has a handle on its strengths, host your own mover and shaker meetings with other like-minded organizations to share best practices so that the circle can begin again.

Lori Schwind

The Competitive Enterprise Institute has put together a series of videos called “Policy Translated,” whose purpose, I gather, is to cut through the fog and simplify major policy issues for Americans. You can see the one on corporate social responsibility here. Go ahead and watch. I’ll wait.

If you decided to skip ahead, though, I’ll summarize. Companies contribute everything they need to contribute to society by being in business. They create jobs, pay taxes, make shareholders wealthier (at least ideally) and keep the economy humming with their purchases of goods and services. Demands for companies to do anything more will be the death of capitalism. Or, in a word, refried Milton Friedman.

This whole line of thinking depends upon setting up straw men that have nothing to do with modern thinking about CSR. No reasonable human is dreaming of the day when corporations will take every cent they make – and then some – and hand it over to social agencies. Of course that would destroy capitalism; who would deny that? But that’s not what CSR is about.

This either/or approach to the discussion of corporate responsibility is tiring after a while. For decades, companies voluntarily have set aside resources to do their part to make their communities better. There’s nothing new about this. And there’s nothing to force companies to do so. Companies may feel pressure from demands for corporate responsibility, but the decision of how to respond to that pressure is theirs and theirs alone to make.

Whenever I see these simplistic critiques, I feel like borrowing the line Ronald Reagan used to disarm Jimmy Carter: “There you go again.” (The issue Carter was attacking Reagan on, incidentally and fittingly for this day and age, was health care reform. But that’s another story.)

If the Institute wants to make a real contribution, it can do better than the “take a swipe” videos it has produced. What do you think?

Peter Faur, RightPoint Communications Inc.

Twenty-five years ago, I edited Enterprise, an employee publication for Southwestern Bell Corp., which at that time was newly independent from the mother ship of AT&T. Ironically, years after the government split the Bell system apart, Southwestern Bell became so strong that it bought almost all the old pieces of AT&T, including AT&T, and renamed itself AT&T. That’s a story for another day, however.

At the time, Southwestern Bell, as a newly independent company, turned to a number of management experts and thought leaders for advice and counsel. One of them was a young Paul Hawken, who had just written a book called The Next Economy and had founded Smith & Hawken five years earlier. Just recently, Smith & Hawken announced it was going out of business, but it had a good run. Over the years, Hawken himself has continued to be respected as a thinker and innovator in sustainabilty and environmental responsibility.

Today I want to share some of the thoughts Hawken brought 25 years ago to Southwestern Bell. In my next post, I’ll share some of his more recent thinking. It’s interesting to see how a thought leader like Hawken can find a theme early in his professional life and then grow personally and professionally with it over the years. Here is Paul Hawken, circa 1984:

For the past 100 years, we, as a society, have been developing our motor skills. For the next 100 years, we will be putting the nerve system in place as we turn from a mass economy to an informative economy.

From 1880 to 1973-74, we experienced what I term the mass economy, in which we developed our manufacturing capabilities. During each decade of that period, we escalated our use of fossil fuel to produce goods for the masses. And we were successful.

But since 1973, the cost of energy in real terms has gone up, and wages in real terms have gone down. Therefore, we have had to make a choice – to use less energy or continue to consume. We are changing rapidly, entering what I call the informative economy.

This new economy is characterized by an emphasis on design, utility, knowledge. It is more human in that it stresses service, morale and understanding.

And it is a consumer-led change. For many years, Americans assumed their wages always would continue to go up. Their purchase patterns reflected this.

Now Americans are emulating Europeans, who have seen their economies wiped out every few decades by war. Europeans are cautious consumers. Americans are becoming much more cautious and are demanding quality. We may have less, but it will mean more to us.

This change in consumer attitudes has a big impact on an industry (like telecommunications) that is being deregulated. Your industry will have to satisfy the selectivity of the market.

One way you are doing this is the introduction of technology such as fiber optics. Such technology uses fewer resources but possesses more intelligence. This is key in the informative economy. The phone system will become a nervous system that thinks.

There are certain problems involved in this transition from the mass to the informative economy. There will be high capital costs, the liquidation and breakup of large corporations, a contraction of government and the elimination of the middle man.

But overall, the shift to the informative economy presents a tremendous opportunity for entrepreneurs who can see the change and take advantage of it.

I read Hawken’s words today and am very impressed with how much he got right. What are your thoughts?

Peter Faur, RightPoint Communications Inc.

As I mentioned in my last blog entry, Paul Hawken, already 25 years ago, was working with themes that have sustained his career for, well, a quarter of a century. I’m particularly impressed that he saw the drive toward building quality into products, to reduce energy, and to succeed by providing exceptional customer service.

This spring, Hawken gave the commencement address at the University of Portland. These excerpts show what he’s talking about today. I can’t think of a better challenge to be laid down for those who care about corporate citizenship:

Class of 2009: you are going to have to figure out what it means to be a human being on earth at a time when every living system is declining, and the rate of decline is accelerating. Kind of a mind-boggling situation… but not one peer-reviewed paper published in the last thirty years can refute that statement. Basically, civilization needs a new operating system, you
are the programmers, and we need it within a few decades….

There is invisible writing on the back of the diploma you will receive, and in case you didn’t bring lemon juice to decode it, I can tell you what it says: You are Brilliant, and the Earth is Hiring. The earth couldn’t afford to send recruiters or limos to your school. It sent you rain, sunsets, ripe cherries, night blooming jasmine, and that unbelievably cute person you are dating. Take the hint. And here’s the deal: Forget that this task of planet-saving is not possible in the time required. Don’t
be put off by people who know what is not possible. Do what needs to be done, and check to see if it was impossible only after you are done….

When asked if I am pessimistic or optimistic about the future, my answer is always the same: If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand the data. But if you meet the people who are working to restore this earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse. What I see everywhere in the world are ordinary people willing to confront despair, power, and incalculable odds in order to restore some semblance of grace, justice, and beauty to this world. The poet Adrienne Rich wrote, “So much has been destroyed I have cast my lot with those who, age after age, perversely, with no extraordinary power, reconstitute the world.” There could be no better description. Humanity is coalescing. It is reconstituting the world, and the action is taking place in schoolrooms, farms, jungles, villages, campuses, companies, refuge camps, deserts, fisheries, and slums….

The first living cell came into being nearly 40 million centuries ago, and its direct descendants are in all of our bloodstreams. Literally you are breathing molecules this very second that were inhaled by Moses, Mother Teresa, and Bono. We are vastly interconnected. Our fates are inseparable. We are here because the dream of every cell is to become two cells. And dreams come true. In each of you are one quadrillion cells, 90 percent of which are not human cells. Your body is a community, and without those other microorganisms you would perish in hours. Each human cell has 400 billion molecules conducting millions of processes between trillions of atoms. The total cellular activity in one human body is staggering: one septillion actions at any one moment, a one with twenty-four zeros after it. In a millisecond, our body has undergone ten times more processes than there are stars in the universe, which is exactly what Charles Darwin foretold when he said science would discover that each living creature was a “little universe, formed of a host of self-propagating organisms, inconceivably minute and as numerous as the stars of heaven.” …

Ralph Waldo Emerson once asked what we would do if the stars only came out once every thousand years. No one would sleep that night, of course. The world would create new religions overnight. We would be ecstatic, delirious, made rapturous by the glory of God. Instead, the stars come out every night and we watch television….

This extraordinary time when we are globally aware of each other and the multiple dangers that threaten civilization has never happened, not in a thousand years, not in ten thousand years. Each of us is as complex and beautiful as all the stars in the universe. We have done great things and we have gone way off course in terms of honoring creation. You are graduating to the most amazing, stupefying challenge ever bequeathed to any generation. The generations before you failed. They didn’t stay up all night. They got distracted and lost sight of the fact that life is a miracle every moment of your existence. Nature beckons you to be on her side. You couldn’t ask for a better boss. The most unrealistic person in the world is the cynic, not the dreamer. Hope only makes sense when it doesn’t make sense to be hopeful. This is your century. Take it and run as if your life depends on it.

Peter Faur, RightPoint Communications Inc.

March 16, 2010 — Jeffrey Hollender, co-founder of Seventh Generation (and a keynote speaker at the recent  New Models of Social Responsibility Communitelligence Summit) unveiled a new book today designed to offer strategies to help the next generation of businesses win with sustainability in the marketplace.

The release, posted to CSRwire, states: “Industry heavyweights like IBM, Nike and British merchandising giant Marks & Spencer to emerging dynamos like Linden Lab and Etsy — are winning customers and profits by:

• Taking on a cause. Revolutionary responsible companies believe that what you stand for is far more important than what you sell. When Organic Valley organized itself around a mission that mattered — saving the family farm — it sparked employee’s imaginations and became a magnet for powerful partners. The result: it’s now the nation’s second largest brand of organic dairy products.

• Daring to wear the see-through. To be a truly responsible company, you can’t be opaque. So the Danish pharmaceutical Novo Nordisk, the world’s largest maker of insulin, invites animal welfare activists to tour its labs and improve its protocals for animal experimentation. The drug maker understands that by acting transparently, it stands a better chance of turning critics into collaborators.

• Scaling innovation. Green marketing campaigns don’t cut it anymore; insurgent good companies focus on innovation rather than reputation. Nike harnesses the creativity of its designers through the Considered Index, which rates the ingredients for each product it uses and suggests more sustainable alternatives.”

The release goes on to say that many more actionable strategies from the book will help businesses large and small win the race to the future. I don’t know about you, but I can’t wait to get my hands on a copy. The book, “The Responsibility Revolution: How the Next Generation of Businesses Will Win” is published by Jossey Bass. Cost is $27.95.

Look for a recap on the book from me the immediate future.

Lori Schwind

The corporate social responsibility industry is starting to draw criticism for not being … responsible. Questions are being asked about how companies elevated to “best citizen” status get there in the first place, as a blog entry in today’s Christian Science Monitor points out.

Writer Christine Arena notes that “to an increasing number of observers, the transparency (of how corporate responsibility leaders are crowned) seems elusive – as does a clear indication of what the CSR industry stands for.” She notes that numerous companies with significant blemishes and faults nevertheless win recognition as corporate citizenship leaders, including Citigroup, Goldman Sachs, ExxonMobil, Chevron and Monsanto. She also notes that many organizations offering CSR rankings rely on financial support from the companies being ranked.
This is no reason, of course, to jettison efforts to hold companies accountable for their performance and to reward and punish companies accordingly. It signals, however, that the CSR industry needs to come of age and needs to be honest with itself about its shortcomings and opportunities for improvement.

In the realm of CSR, there is no counterpart to the accounting profession’s generally accepted accounting principles (GAAP). There’s no equivalent to the International Standards Organization, whose ISO 9000 (quality) and ISO 14000 (environment) requirements are universally recognized as gold standards.

Efforts are being made in the area of CSR, and the guidelines of the Global Reporting Initiative might yet attain such status. Now, however, companies often feel free to pick and choose which guidelines they’ll select and which they’ll ignore in reporting on their CSR performance.

It’s a growing issue, and until it is better addressed, it will hamper efforts to ensure that companies are held accountable for corporate social responsibility performance.

What do you think?

Peter Faur, RightPoint Communications Inc.

I had just been reading another book on sustainability when my copy of The Responsibility Revolution arrived in the mail.  Wrapped in 100 percent post-consumer fiber, I picked up the book, read the preface and introduction and gleefully put down my prior read to immerse myself in Hollender and Breen’s next adventure.

A nice complement to The Necessary Revolution, by Peter Senge (Senge writes the forward in this book as well) Hollender and Breen have a refreshing way of making responsibility real and tangible for companies considering the shift to this new for-purpose (and profit) way of life.

The book’s opening chapter champions five directives businesses can adopt to transform conventional enterprises into “responsible and authentic” businesses. To support this blueprint, Hollender and Breen provide provocative case studies that support their theories and prescription for success. While Hollender admits: “There is, of course, no one right way to transform a conventional company into a revolutionary company” — the authors note four key principles must be manifest — mission, transparency, authenticity and innovation.  Following is a high-level overview of the five directives outlined by Hollender in the book.

Blueprint For a Responsible Company

To build a truly authentic and responsible company, Seventh Generation’s Co-Found Jeffrey Hollender says a company’s mission should matter.  “Responsible companies believe that what you stand for – your purpose and values – is far more important than the products you make or the services you sell.” He adds: “When organizations stand for something big – something that truly matters to people – they sharply differentiate themselves from their competition.”

To build trust in the company and its mission, Hollender states that organizations need to become transparent in their dealings with all stakeholders, from employees and customers to communities beyond. “By publicly baring its less than admirable impacts on society and the environment,” Hollender writes, “the transparent company preempts its critics – and takes the first step towards collaboratively fixing its problems.”

To unleash solutions, Hollender proposes that responsible companies transform workplaces into burgeoning communities of purpose and innovation. “Talented people, animated by a community’s sense of purpose,” the authors explain, “provide the brainpower for generating breakthrough ideas and the firepower for getting them into the world.” In other words — when companies let associates set their strategic direction, they act less like employees and more like entrepreneurs primed to innovate.

To optimize the value of “community” innovation, Hollender advocates bringing consumers into the organization. The more heads a responsible company can collaborate with, he notes, the greater the impact on the company and marketplace.  “Good companies genuinely listen to customers and outside stakeholders. They interact. And a few dare to put consumers at the very heart of their innovation process,” Hollender observes.

Whether an organization seeks to create meaningful innovation, build community or bring consumers into the fold– Hollender is emphatic that all actions must come from an authentic place that demonstrate a “real” commitment to solution-making. “Do-good marketing doesn’t cut it anymore,” Hollender writes in his book.

And lastly, for the responsible enterprise seeking longevity, the authors state: “No enterprise can truly attempt to embed the sustainable ethos into everything it does without constructing a collective view of what it should be.”  To demonstrate the value of this insightful point, Hollender opens chapter two with his first case study — a deep dive into OrganicValley’s 2004 Dry Thursday event.

If you’re not familiar with this story (originally covered in Inc. Magazine), a massive shift to all things organic back in December 2004 meant Organic Valley did not have enough product to fill orders. The company had a critical choice to make – continue to serve the big box retailers who were driving organic mainstream, or hold true to the green grocers that helped build the market in the first place. Since this case study is central to the heart of the book and Hollender’s blueprint for a responsible company, I won’t delve into specifics here other than to say that Hollender is spot on when he says: Mission matters. To learn more about this case study and others profiled in the book, check out The Responsibility Revolution.

Source: The Responsibility Revolution, Jeffrey Hollender and Bill Breen, March 2010, Jossey-Bass™ Publishing. All quotes attributed to authors.

Lori Schwind

Walmart is viewed by many people as the Darth Vader of retailing, and I certainly have my complaints about the company. You should recognize, though, that by its sheer size, Walmart can have a substantial impact on sustainability issues.

I have friends in the personal care products industry and the pool maintenance products industry, and both have told me how strongly Walmart is demanding that their products meet sustainability standards. In both cases, Walmart is their companies’ single biggest customer. If they don’t want to lose the relationship, they will make it happen.

With that in mind, I thought you’d be interested in this video. It features the head of a company called WorldWise, which has been a Walmart vendor since 1996. WorldWise takes Walmart waste, such as plastic bags, bottles and hangers, and turns it into pet products. Watch the video below to learn more.

So if you don’t care for Walmart, will its efforts to address sustainability start to change your mind? Leave a comment to let us know.

Peter Faur, RightPoint
Communications Inc.

Watch the Video