Top CEO’s across a business roundtable, ranging Apple to Walmart, openly penned the importance of value through extended filters beyond results or profits alone.
Harvard Business Review share some interesting perspectives on this evolution. Notably, if we travel back in time 50 years, prior essays depicting corporate social responsibility was generally limited to increasing profits: or, as they put it, a worldview of ‘the businesses of business is business’.
This isn’t negative, nor does it equate to lacking ethics or philanthropy. It’s just perhaps as a freestanding philosophy in current times it’s now over simplified, shortcut or misunderstood. You know the same way ‘fake it till you make it’ is translated!
This upgrade in considerations calls out four other groups of key stakeholders in addition to shareholders: customers, employees, suppliers and communities.
We read weekly, if not daily, about an increased awareness of corporate social responsibility. In a world with easier access to information or expression of opinions, good corporate citizens need to be giving gas to aspects others than profits in order to maintain relevance, popularity or loyalty which ultimately deliver sought after results.
Social cause through the employee filter
Nielsen and engage for good highlight a generation of employees, especially millennial, interested in the impact of the businesses they work for even over remuneration. The HBR article express similar findings sharing that over 1.5 million employee observations, across thousands of organisations, equated purpose as being conducting work of meaning and impact of efforts being felt.
Clarity in vision, mission or values means companies might tap employee experience, effort and desired behaviours far more easily: even from the start of a hiring journey. This increases the likelihood of procuring best-fit talent. Additionally retention and discretionary effort (both go a long way towards profitability over time) become increasingly likely.
Businesses like Atlassian also impact social cause and philanthropy offering paid days, 5, for employees to ‘be the change’ they wish to see. They get hands on working with charities they support. Of course social cause may also be impacted more simply by taking into consideration relevant challenges faced by your people: i.e paternity/maternity leave, flexibility for two parent working families or ensuring values like inclusivity aren’t merely pretty posters hanging on a wall.
Social cause through the customer filter
The Sydney morning herald recently ran a feature ‘the rise of start-ups with a positive purpose. Zenify is one example: retail purchases from consumers translate to donations making a broader societal impact. This is a vibe the tribe will likely get behind: Zenify experienced a year of 200% growth.
Business models may even be adapted with this in mind. ‘Who Gives A Crap’ operate a 50% of profits going towards building toilets for circa 2 billion people who don’t easily have access. A figure incidentally that has dropped in the years they’ve been operating. No doubt in part to their own efforts. Social cause here turns a rather mundane household item, and supporting consumers along with it, into heroes: wearing triple ply capes perhaps.
Social cause through the community filter
Corporate social responsibility was once a nice to have. Now it’s almost essential in the playbook. Chobani are a classic example of early adopters in this regard: they’re frequently referenced for investing in the very communities their employers lived, worked or were a part.
Something corporates are doing more strategically is playing in the community space with firmer commitments or longevity in mind. Social cause can be impacted through mechanisms such as grants or donations but also donation or access to resources.
Atlassian again spring to mind, announcing only last month a $70 million fund as a structured initiative rather than ad hoc approach. This supports developers and channel partners in the cloud based eco system in which they operate. Identifying grass roots causes, then nurtured over time, aligned with the vision or a mission of a business, may well be philanthropic yet it’s also smart creating a circular economy feeding back into profits in the long run.
Social cause through the supplier filter
It didn’t take a global meltdown or challenges due to COVID for many corporates to realise they had to play a fairer game. Some players in the top end of town earn notoriety as slow payers whilst simultaneously demanding rapid cash after invoicing their own customers. The pressure of cash flow, chasing invoicing, only serves great providers to waste time or potentially taint relationships.
Additionally, corporate negotiators want a great deal. That said, reliable service providers, who add value consistently to your business without fuss or stress, are worth their weight in gold. So negotiate firmly but fairly ensuring all parties are genuinely happy with terms. While you’re at it, find out the causes they support. Helping back your external collaborators creates additional stickiness not only via positive PR but also potential customers.
A final thought has to do with sustainability. It’s a subject symbiotically linked with social impact. So consider sustainability through four filters and not only the most commonly interpreted one: being less plastics or food waste. When corporates concern themselves with sustainability via human talent (continued education), social fairness (quality of living or rights) and economic impact (investment into communities) in addition to environmental impact the chances are they’re being a great citizen and adding value to communities, philanthropy or social cause as a direct result.
Commentary by Sean Mooney. Here’s what you’ve missed?