Goodbye Corporate Social Responsibility, Hello Corporate Sustainability

I read an interesting article today in the Wall Street Journal called Good Intentions. It addresses the fact that 1/3 of companies cut their corporate social responsibility (CSR) budgets in 2009 and corporate philanthropy fell by 8% in 2008. While just looking at the numbers this may appear to be a great setback, the article discusses how it’s actually not such a great loss because random acts of corporate giving and marginal initiatives are not enough to alter corporate behavior. What’s needed is corporate sustainability.

Will Marre, CEO of Realeadership Alliance, agrees. He states, “Business is not just about making a profit anymore; it’s about creating a sustaining business culture that energizes employees, creates a unique profit edge and makes a positive impact on humanity and the environment. Anything less is a waste of valuable time and resources we need for a sustainable future” (See Leadership Development Speaker, Will Marré, Trains Business Leaders for the Future). So what exactly is the difference between CSR and corporate sustainability? The WSJ article quotes Scott Beaudoin, director of cause marketing at MS&L in Boston, who says: “Companies are asking how they can be socially responsible in a way that also moves the business forward. It’s no longer about having one corporate social responsibility guy who is supposed to be the moral compass for the company, like a chaplain in an Army regiment. It’s about making sustainable business the standard operating procedure.”

Corporate sustainability, according to Wikipedia, is “a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments…Unlike the other phrases that focus on “added-on” policies, corporate sustainability describes business practices built around social and environmental considerations.”

A huge driver of sustainability rather than responsibility is innovation. Corporate Sustainability—It’s About Attitude discusses a paper by BT and Cisco, “A New Mindset for Corporate Sustainability.” It discusses the limitations of CSR thinking, “namely an attitude that these practices are costly to business, inhibit growth and negatively impact the bottom line.” Sustainability, on the other hand, is a catalyst for innovation. It gives ten steps companies should take to drive innovation via sustainability. Some are 1) Make innovating for sustainability a part of your company’s vision, 2) Formulate a strategy with sustainability at its heart, 3) Embed sustainability in every part of your business, and 4) Walk the talk (actions speak louder than words).

A new study, Why Sustainability is Now the Key Driver of Innovation, also discusses the mindset of sustainability. It states, “Sustainability isn’t the burden on bottom lines that many executives believe it to be. In fact, becoming environment-friendly can lower your costs and increase your revenues. That’s why sustainability should be a touchstone for all innovation.” It continues, “In the future, only companies that make sustainability a goal will achieve competitive advantage that means rethinking business models as well as products, technologies, and processes.” The paper goes on to give a five-stage process in becoming sustainable.

Marre, who has long been changing the phrase, Corporate Social Responsibility, to Corporate Social Opportunity, discusses in New Leadership Training for Strategic CSR Announced by Will Marre how business has gone through three phases of CSR. The first was the mandate for businesses to remove the toxic processes and impacts from their operations. This included practices such as eliminating pollution and labor exploitation. Phase two has been to embrace sustainability and contribute to the community. Sustainability practices have yielded huge cost savings as waste is being eliminated from core business processes. Corporate philanthropy has also become increasingly important to promote brand reputation.

Marre even takes it a step further. He says that as good as these initiatives are, phase three is a “quantum leap” in creating strategic business value for companies who see that helping humanity and healing the environment are far bigger opportunities than stopping bad practices or polishing a corporate reputation. Phase three of the CSR revolution is socially strategic leadership that unites a 21st century leadership paradigm, business models and EverGreen™ innovation to create unique value.

According to Marre, “Reinventing the world to be sustainably abundant is the greatest economic opportunity in history.” The possibilities are indeed endless for those who move beyond business-as-usual and embrace the challenge of changing our future. CSR make way for corporate sustainability.

Social Enterprise is the Wave of the Future

We live in an exciting time.  Boundaries are blurring between business and philanthropy like never before, and the result is radical new social enterprises that are taking on the world’s problems with new innovation and sustainable solutions.

In her speech, You Are the Future of Philanthropy, Katherine Fulton discusses the exciting changes in philanthropy inspired by the entrepreneurial spirit.  She calls it a democratization of philanthropy in which the average person has more power than at any other time in history to make a difference.  She explains five categories of new philanthropy: mass collaboration, online philanthropy marketplaces, aggregated giving, innovation competitions, and social investing.  She states, “I’m hopeful because it’s not only philanthropy that’s reorganizing itself.  It’s also whole other portions of the social sector, and of business, that are busy challenging ‘business as usual’….There is a new moral hunger that is growing.”

Leadership speaker and expert, Will Marre, in Social Enterprise: How to Save the World and Grow Your Business at the Same Time, also discusses the changes in philanthropy and business with the rapidly emerging trend of social enterprise.  He explains how social enterprise is enterprise that incorporates the efficiencies, disciplines and rewards of for-profit business with the broader interests of directly solving humanitarian and environmental challenges. 

Marre believes that social enterprise is the future of both business and philanthropy because as he states, “They can grow steadily and produce abundant profits, they are often market leaders, they reward their employees, offer meaningful work and personal growth, benefit their communities, and improve the environment––all at the same time.” 

Marre concludes, “Reinventing the world to be sustainably abundant is the greatest economic opportunity in history.  It is exciting to be at the beginning of our new future.”     

Isn’t this the kind of enterprise you want to be a part of? 

Socially Responsible Leadership and Wise Leaders Who are Investing in the Future of Humanity

It’s easy to be outraged at the incompetence and greed apparent in business leadership. Titanic ethical failures like Enron, failures in judgment by General Motors and greed-induced insanity by our major financial institutions have caused millions to suffer. Leadership failure is so bad the Economist magazine reports that only 2% of consumers worldwide trust business leaders to do the right thing if it costs them profits. With business institutions having the most trans-global power on earth, that is breathtakingly bad.

But there is a strong minority of courageous and wise leaders who use their resources for much more than self-interest. More needs to be known about these wise companies who lead their industries, embrace sustainability and are investing in the future of humanity.

Take FedEx and Johnson & Johnson for example. They have partnered with Heart to Heart International, a health-based nonprofit whose main focus is to get life-saving medicine and supplies to victims in crisis. Their work has never been as important as now as they rush to get much needed supplies and medical support to help save Haiti earthquake victims.

Fed Ex and Johnson & Johnson make these efforts possible. Not only has FedEx provided significant financial support and transportation services to Heart to Heart, but they also have created Forward Response Centers—FedEx warehouses full of relief supplies that are ready to go to virtually any disaster zone in the world quickly and efficiently. These centers take up valuable space in FedEx warehouses, but they do it because they understand that business is about more than money. When the tsunami hit Thailand in 2007, FedEx planes were among the first to land medical supplies. These Forward Response Centers have made it possible for Heart to Heart to be among the first responders to the Haiti disaster.

Johnson & Johnson is one of the main generous providers of these supplies which include The Ready Relief Box, otherwise known as the portable pharmacy that contains such items as pain relievers, antibiotics, vitamins, first aid supplies and doctor’s essentials such as a stethoscope and digital thermometer; The Medical Surge Module, which can increase capacity at healthcare facilities by providing enough medical supplies for 2,000 patients; and The Personal Hygiene Kit, which provides hygiene care for up to two weeks and is vital after a disaster to prevent contagious diseases from running rampant.

And wise leadership is not limited to a few visionary corporations. Today the non-profit Grameen Foundation is focusing their efforts on economic recovery—both short- and long-term. In partnership with Sèvis Finansye Fonkoze (a Grameen Foundation microfinance partner in Haiti), the Grameen Foundation will build upon their existing efforts in Haiti of using microfinance and technology to help Haitians, especially women, move themselves out of poverty and build a more self-reliant future. The President of the Grameen Foundation, Alex Counts, states, “Please help us help the nation recover from this recent disaster and try, as hard as it may be to imagine, to help our local partners build a Haiti that is more prosperous than pre-earthquake conditions.”

So what’s going on with these enterprises? What drives their leaders to do what others refuse to do? In my 30 years of working with senior leaders I can only conclude it is, at its core, one thing. Wisdom. Plato defined wisdom as “a knowledge of the Good and courage to act accordingly.” He further described wisdom as the commitment to seek the right balance between “all that exists.” What we today might call sustainability. At the core, wisdom is moral courage. As philosophers from every culture, across time have noted, it is not enough to know what is Good. We must also act on that knowledge. The responsibility of today’s business leaders to act from wisdom is essential for our future. We are all increasingly connected and to act only on self-interest is poisoning the water that our children drink.

Sadly, nearly all leadership failure I have witnessed up close has been the result of many small decisions that compromise the wise choice into simply an expedient one. Too many leaders are driven by fear. Fear of being criticized by the Wall Street money-changers or fear of being second guessed by their own hard driving executive team. Fear makes leaders stupid. The neurobiology of fear literally extinguishes creativity, open-mindedness and moral reasoning. We need leaders who have the everyday courage to act on the “Good” as a way to create more value for all. When I counsel senior leaders I often ask them, “How much good can you do, right now? When I get a response I simply say, “Do that.” You see doing the best thing you can imagine in a sustainable, wise way always creates value that makes you and your enterprise stand apart. So it not only ends up being wise but also smart.

Most of the few great companies that are doing the most to restore environmental balance and benefit humanity don’t toot their horns about it. (Who knew FedEx planes were landing in Haiti full of medicine?) No, that’s not a good thing. In 2003, I founded REALeadership Alliance to do just that; help leaders and companies become clear on the good they can do. The wisdom of courageous leaders needs to shine as a beacon to inspire those who fear to wake up and get busy saving our world. It’s actually just wise business.

So what’s the best thing you can do? Transcend your own fear. We are all leaders. All CEOs of our own lives. Be wise. Stand for something that matters. Speak up every day for the best thing you can imagine. Everyday courage accumulates. Our consistent small acts of integrity change the future. We all need to lead.

A Purpose Beyond Self-Interest

Yesterday, I went all the way to Santa Barbara to meet with the founder and CEO of the World Business Academy, Rinaldo S. Brutoco. We are working together to accelerate a movement towards a new form of business leadership worldwide. He’s been leading this organization since 1986. His experiences have been nothing short of remarkable, and he is on a first name basis with many of our world’s most powerful people. I think we are going to cook up some amazing things!

One thing that Rinaldo and I agreed upon is the kind of leadership we need in the 21st Century is a purpose that is beyond self-interest. All of us are driven by a prime motive; that background music that is constantly guiding us in the decisions we make. If all we are interested in is maximizing our pleasure, security, safety, and well being, we are going to end up exploiting others and the planet. The model that the best possible world comes from human beings being the most selfish is the most wrong-headed notion ever foisted on us. It also robs us from our essential dignity, and our highest creativity.

Peg Ross and The Grameen Foundation are Saving the World

I’ve been talking to Peg Ross, who is in charge of Human Capital Development for the Grameen Foundation.  Human Capital is truly a “Save the World” idea.  In most developing countries there is a shortage of trained leaders.  They simply don’t have the decades of history that we do in America of training leaders in business schools or on the job.  Peg has developed a leadership/management curriculum ranging from performance planning to decision making.  Things as basic as setting and achieiving goals as a team are likely to accelerate the effectiveness of a whole new generations of leaders in countries where the poorest of the poor live.
What impresses me so much about Peg is she is a wife and a mom who lives in suburban San Diego when she is not traveling to Bangladesh or India to “Save the World.” She is another one of those seemingly ordinary people doing extraordinary things that it simply blows my mind.

The Gap Does More Than Set Fashion Trends

I recently came across The Gap’s social responsibility website. I was quite impressed and wanted to give a shout out to their efforts. While their contributions to Project Red and their stand against child labor are more well known, what I was most impressed with is their dedication to employee involvement in their CSR initiatives. Some of their initiatives include:

• 2000 employee community leaders who organize company-sponsored service events and act as ambassadors for their work in the company and the community.
• In 2008 alone they donated $10.3 million in employee-driven community investment.
• Their Money for Time program provides a $150 grant to nonprofits for every 15 hours of employee volunteer time.
• Their Take Five program offers exempt corporate employees five hours of paid time off to volunteer each month, or 60 hours per year.
• In Action Days are events organized by employees of Gap Inc. brands to provide local volunteer opportunities. Thousands of employees have participated, dedicating hundreds of hours to a wide variety of projects.
• Team Grants support employee team projects. When at least three store employees spend 25 hours volunteering with a nonprofit that supports underserved youth or women, Gap Inc. provides a $250 grant to that organization. Each store receives an annual grant budget based on store volume. Since the program began in 2006, it has grown significantly, increasing from 220 team projects in 2007 to 723 in 2008.

Will Marre, leadership expert, is a huge proponent of employee involvement in CSR initiatives. In “Personal Social Responsibility Drives Employees to More Deeply Commit to Their Organization’s Success” he cites research that reveals that 93 percent of American employees say it is important for their companies to provide them with opportunities to become involved in social issues, and 72 percent want their employers to do more to support a cause or social issue. Marre believes that the best way to engage employees and create deep loyalty is to provide them with opportunities to make a difference in their community. He calls this Personal Social Responsibility.

Gap Inc. is a great example of Personal Social Responsibility. On their website it states, “We see a direct connection between our employees’ volunteerism and their commitment to Gap Inc. Engaged employees deliver strong business results, which is good for the community and our company. In a 2007 employee survey, nearly all respondents said it is important for them to work for a company that invests in the community. Studies also show that when a person is emotionally connected to a cause, giving is related to positive emotions and personal happiness. The bottom line: volunteering makes people happy, and happy people make better employees.”

Personal Social Responsibility is indeed becoming the new trend of CSR. As Marre states, “In the real world organizations are finding success by transforming a paternalistic paradigm of CSR into a launch pad for inspired employees to “save the world” right where they are.”

Top 10 Things Every Business Leader Should Know About Strategic Sustainability

1. Sustainable Abundance is good for business. Every product and every service needs to be re-invented to create a sustainable future.  This is the greatest economic opportunity in history.  (Consider automobiles, light bulbs, airplanes, energy…. everything.)
2. High Sustainability Standards and Maximizing Human Benefits can generate “leapfrog” designs to invent new products and new business models.  (Toyota was creating the Prius while other car companies slept.)
3. Sustainability Thinking saves money. The relentless challenge to improve durability, re-use parts and eliminate packaging brings bottom line innovation. (91% of old Xerox copier parts are reused in “new” Xerox machines.)
4. Removing the Bad attracts new customers. Consumers and business customers are stampeding to choose the benefits of non-toxic, no-waste products (Clorox’s non-toxic Green Works Cleaners is their fastest growing product portfolio.)
5. Create a Cause Bigger Than Your Brand. Over 80% of consumers say they choose brands that support good causes because it makes them feel like they are “voting with their wallet.” (ClifBar’s brand in the manufactured nutrition bar business repeatedly earns the highest loyalty rating.  They famously support the organic sourcing and the buy local food movement as well as women and fitness initiatives.)
6. Sustainability Obliterates Costs. When smart people consider how to satisfy a need or want without waste or even cost, new business models spring to life.  (When Apple designed the ipod, eliminating the cost/waste of CD manufacturing, shipping and distribution was the natural outcome.  The ipod led to the iphone, greener product design and tens of thousands of digital apps which create user loyalty without more cost.)
7. Sustainability Drives Game-Changing Business Models. When leaders consider solving huge problems in sustainable ways, new thinking creates breakthrough businesses.  Before the radio, who would have thought of music with a band?  Before the light bulb, who would have thought of light without a flame?  (Today micro-entrepreneurs are installing solar panels on huts in the world’s poorest areas because solar generated OLED light is cheaper than kerosene.  Power without the grid.  Is everything possible?)
8. Sustainability Creates Smart Marketing.  Engaging your customers in the benefits and breakthroughs of your green and sustainable products requires a new level and a new type of communication.  It’s called smarketing.  Marketing that makes your customer smart.  (GE recently asked design students to come up with creative ways to use GE’s new organic LED lights.  Tens of thousands have seen their video on YouTube and the product launch is still months away.)
9. Sustainability Attracts Top Talent. The best science, engineering and business schools report that top graduates only want to work for companies that are serious about making a difference in creating a sustainable future.  (Ask any college recruiter.)
10. If You Don’t Fully Embrace Sustainability, You Are Toast. The debate over green is over and green won.  Consider the failures of GM and the transformation of Wal-Mart.  It’s better to ride the wave than drown in the rip tide of change.

For information on the speech or seminar, “Leading for Sustainability,” email candie@willmarre.com.

Will Marre Vision.org Interview about Save the World and Still Be Home for Dinner

The critical issue of leadership today is MORAL INTENT.  If we get very effective people being leaders who don’t have worthwhile moral intent, we get what we’ve got.

In this interview at Chapman University in Orange County, California, Will speaks to Vision about, Save the World and Still Be Home for Dinner… about leadership, organizations, changes in the corporate world, personal contentment, and quality relationships.

Listen to it here.

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Engage with Will on Twitter or Facebook

What Comes Around Goes Around

One of my husband’s favorite television shows is My Name is Earl.  Earl’s new found belief in karma is the backdrop of the show in which Earl tries to set right everything bad he’s done in hopes that by doing good, good will come to him.  While the show is fun and entertaining, I think it makes a good point.  Call it whatever you want—karma, the spirit of the universe, God— I have to agree with Earl.  When we honestly do as much good as we can, it not only benefits those we serve, but the good comes back to us ten fold.  And this rings true in every aspect of our lives, both personally and in business.

So this brings me to my question, why isn’t every company in the world grabbing social responsibility by the horns and incorporating it into their core business model? In Don’t Underestimate Power of Social Responsibility Lisa Hickey asserts that the common phrase, “what goes around comes around” is especially true in business.  She states, “There is a perfect correlation between socially responsible companies and economically viable companies.” 

In The Business Benefits of Corporate Social Responsibility several benefits to business are discussed such as building a reputation as a responsible business sets you apart, customers are rewarding responsible companies, and reducing waste and emissions saves money.  Additional benefits addressed in the article are as follows:

• A good reputation makes it easier to recruit employees.
• Employees stay longer, reducing the costs and disruption of recruitment and retraining.
• Employees are better motivated and more productive.
• CSR helps ensure you comply with regulatory requirements.
• Activities such as involvement with the local community are ideal opportunities to generate positive press coverage.
• Good relationships with local authorities make doing business easier.
• Understanding the wider impact of your business can help you think up profitable new products and services.
• CSR can make you more competitive and reduces the risk of sudden damage to your reputation (and sales). Investors recognize this and are more willing to finance you.

 

Corporate Social Responsibility also describes six driving factors for CSR: (1) the shrinking role of government, (2) demands for greater disclosure, (3) increased customer interest, (4) growing investor pressure, (5) competitive labor markets, and (6) supplier relations.

Will Marré, acclaimed CSR speaker and advocate, is a passionate voice for the benefits of social responsibility.  In Will Marre, Leadership Expert, on How Green Business Is the New Revolution of Business Strategy he’s quoted, “When you combine the triple bottom line of people, planet, and profit, the new sources of value and points of differentiation you uncover yields topline growth, fiercely loyal customers, and committed internal and external talent.”  Marré takes it a step further asserting that when CSR is incorporated into the business model it creates the greatest economic opportunity in the history of the world.   He states in Social Enterprise: How to Save the World and Grow Your Business at the Same Time, “Every problem is an opportunity. In the next decades we will have to re-invent every product we use to be ecologically friendly, energy efficient and recyclable. Just the opportunity to change all the light bulbs in the world has a mind-boggling upside.  The opportunities to lift billions of people from poverty, educate billions to live in the 21st century and unlock the keys to sustainable living and sustainable relationships are endless.”    

So, I return to my question: Why isn’t every company in the world embracing their social responsibilities when there is nothing to lose and everything to gain?  Doing good is a virtuous cycle that positively influences everyone and everything it touches.  So let’s take our cues from Earl, and even if our reason for doing good is so that good will come to us, we’ll make the world a better place.

 

Why Do We Work?

On average Americans work 52.2 hours a week, 261 days a year resulting in 2,088 hours a year.  Wow.  That’s a whole lot of time spent working.  So this brings me to my question…..

Why do we work?

In What People Want From Work Susan M. Heathfield states, “Whatever your personal reasons for working, the bottom line, however, is that almost everyone works for money. Whatever you call it: compensation, salary, bonuses, benefits or remuneration, money pays the bills.”

In Why Do We Work? One Career Changer’s Answer Lisa Cullen gives the definitive answer….PASSION.  She goes on to give an example of a Kinko’s executive who gave up the big career to pursue work that aligned with her passion of walking.

In Why do we work? Brian Dumaine states, “When Fortune asked scores of managers, from CEOs to warehouse supervisors, why they worked, the three most common reasons cited besides paying the mortgage were to make the world a better place, to help themselves and others on their team grow spiritually and intellectually, and lastly, to perfect their technical skills.”  The article goes on to give the example of Tom of Tom’s of Maine, an environmentally focused company that makes toothpaste and other personal items, who set out to make his work more fulfilling and better the world.  The article also explains how an insurance CEO found his work to be a worthy profession because “life is unfair, bad things happen to good people, and insurance is a way to help those good people for whom fate dealt a bum hand. For him, something as seemingly mundane as insurance took on great meaning.”

In The Future of Work:  Engaging Employees to Drive Innovation Will Marré asserts that employees want to work for reasons beyond a paycheck.  He cites research that indicates over 85 percent of workers want work that contributes to a better society and a healthier environment.  They want to work to benefit society.

All of us have our own reasons for working.  But the truth is more and more of us work for reasons besides just the money.  Let’s face it.  We work 2,088 hours a year.  Why not spend that time doing something that makes the world a better place and brings us something more than money?

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