Fire Your CSR Department
Did you know that Nestle doesn't have a CSR department, per se?
"Outrageous! A clear reflection that they are a big, bad corporation!", I hear you say.
I wish more companies were like Nestle in this respect.
And this is why I am blogging. This is why I entitled the blog "CSR For CEOs". It's not that I really expect CEOs to click on my articles any time soon; it's more a reflection that I believe the time has come to relook at how CSR fits into large corporations.
You see, I believe Corporate Social Responsibility is too complex and important a concept for it to be successfully accomplished by an often isolated, powerless, small and junior set of employees. A tiny island in a big ocean. Corporate Social Responsibility is a principle, not a department.
A couple of more enlightened approaches to CSR can be found within the work of Tim Fort and Stu Hart.
In Business, Integrity and Peace, Fort's Total Integrity Management framework points to a progression of ethical behavior:
* Hard Trust (not breaking laws relating to pollution, working conditions and so forth);
* Good Trust (being a contributing member of the communities in which you operate);
* Real Trust (integrating ethics and responsibility to all stakeholders into everything your organization and its people do).
In Capitalism at the Crossroads, Hart offers The Sustainable Value Framework to observe that organizations must employ different strategies in all four quadrants of operations: Internal/Today, External/Today, Internal/Tomorrow, External/Tomorrow. There should be a multiple bottom line return on investment from efforts in each area - including increasing revenues or reducing costs.
* Internal/Today, might include reducing waste in your processes, reducing costs.
* External/Today might include reaching out to the community to understand what they want and need from your products, increasing sales.
* Internal/Tomorrow might include innovation in technologies that address major social problems related to your area of competency, creating new product and service lines.
* External/Tomorrow might include reaching out to new and underserved markets, understanding their needs and realities and creating mutually beneficial business ventures, creating new markets for your products and services - and an inclusive global economy.
So, with all this "Strategic CSR" activity needing to be done, why on earth should I be proposing the disbandment of CSR departments? Isn't the logical conclusion that we should instead grow the CSR staff size and budget?
Take another look at the frameworks offered by Fort and Hart (who are, of course, just two of the many people looking at issues of CSR, sustainability, ethics and so forth). For each dimension, ask yourself a couple of questions:
* what kind of skills and competencies should people have in order to do this work effectively?
* where in the company should such a responsibility sit in order to be effective?
For each profile, I imagine you will find different answers, ranging from audit, analysis, to R&D, innovation, to consulting, to leadership, to management, to finance, to HR. In terms of organizational structure, it is clear that between the two frameworks, almost every department has a role to play. These are very distinct skill-sets, also, yet so often at the moment all aspects are handled by a small team of generalists.
This is exactly why the responsibility for CSR cannot be simply delegated. It is not something you do as a leader, it is something you are - which is why Fort uses the word "Integrity". A higher standard of ethics, a greater contribution to the communities in which you work, a sense of service as you go about making the profits your shareholders require: this is the work of leaders - from the CEO all the way down to the newest recruit.
Nestle don't have a CSR department per se. Instead, they have a communications team that gathers all the stories of contribution and service and creativity that run throughout their operations; "Creating Shared Value" is what they call it. I am not here to argue that Nestle is perfect, nor that they are unique in attempting an integrated approach; my point is that they are approaching things from the right direction. I venture that this integrated approach to CSR in truly global companies would have a higher impact, in a more sustainable manner - and return greater profits to the corporation, than a CSR department of 1000 people working in isolation from the business.
***************************************************************
I posted this piece on my blog at http://csr4ceos.typepad.com recently, and so having recently joined onto Development Crossing, I thought it might provoke an interesting conversation.
Should CSR be integrated or stand alone? If the former, which companies are really integrating CSR well? Which companies are having more impact and significantly increasing profits as a result of their sustainability strategies? If the latter, which companies have truly effective CSR strategies driven by independent departments?
All views welcome!
Chris
"Outrageous! A clear reflection that they are a big, bad corporation!", I hear you say.
I wish more companies were like Nestle in this respect.
And this is why I am blogging. This is why I entitled the blog "CSR For CEOs". It's not that I really expect CEOs to click on my articles any time soon; it's more a reflection that I believe the time has come to relook at how CSR fits into large corporations.
You see, I believe Corporate Social Responsibility is too complex and important a concept for it to be successfully accomplished by an often isolated, powerless, small and junior set of employees. A tiny island in a big ocean. Corporate Social Responsibility is a principle, not a department.
A couple of more enlightened approaches to CSR can be found within the work of Tim Fort and Stu Hart.
In Business, Integrity and Peace, Fort's Total Integrity Management framework points to a progression of ethical behavior:
* Hard Trust (not breaking laws relating to pollution, working conditions and so forth);
* Good Trust (being a contributing member of the communities in which you operate);
* Real Trust (integrating ethics and responsibility to all stakeholders into everything your organization and its people do).
In Capitalism at the Crossroads, Hart offers The Sustainable Value Framework to observe that organizations must employ different strategies in all four quadrants of operations: Internal/Today, External/Today, Internal/Tomorrow, External/Tomorrow. There should be a multiple bottom line return on investment from efforts in each area - including increasing revenues or reducing costs.
* Internal/Today, might include reducing waste in your processes, reducing costs.
* External/Today might include reaching out to the community to understand what they want and need from your products, increasing sales.
* Internal/Tomorrow might include innovation in technologies that address major social problems related to your area of competency, creating new product and service lines.
* External/Tomorrow might include reaching out to new and underserved markets, understanding their needs and realities and creating mutually beneficial business ventures, creating new markets for your products and services - and an inclusive global economy.
So, with all this "Strategic CSR" activity needing to be done, why on earth should I be proposing the disbandment of CSR departments? Isn't the logical conclusion that we should instead grow the CSR staff size and budget?
Take another look at the frameworks offered by Fort and Hart (who are, of course, just two of the many people looking at issues of CSR, sustainability, ethics and so forth). For each dimension, ask yourself a couple of questions:
* what kind of skills and competencies should people have in order to do this work effectively?
* where in the company should such a responsibility sit in order to be effective?
For each profile, I imagine you will find different answers, ranging from audit, analysis, to R&D, innovation, to consulting, to leadership, to management, to finance, to HR. In terms of organizational structure, it is clear that between the two frameworks, almost every department has a role to play. These are very distinct skill-sets, also, yet so often at the moment all aspects are handled by a small team of generalists.
This is exactly why the responsibility for CSR cannot be simply delegated. It is not something you do as a leader, it is something you are - which is why Fort uses the word "Integrity". A higher standard of ethics, a greater contribution to the communities in which you work, a sense of service as you go about making the profits your shareholders require: this is the work of leaders - from the CEO all the way down to the newest recruit.
Nestle don't have a CSR department per se. Instead, they have a communications team that gathers all the stories of contribution and service and creativity that run throughout their operations; "Creating Shared Value" is what they call it. I am not here to argue that Nestle is perfect, nor that they are unique in attempting an integrated approach; my point is that they are approaching things from the right direction. I venture that this integrated approach to CSR in truly global companies would have a higher impact, in a more sustainable manner - and return greater profits to the corporation, than a CSR department of 1000 people working in isolation from the business.
***************************************************************
I posted this piece on my blog at http://csr4ceos.typepad.com recently, and so having recently joined onto Development Crossing, I thought it might provoke an interesting conversation.
Should CSR be integrated or stand alone? If the former, which companies are really integrating CSR well? Which companies are having more impact and significantly increasing profits as a result of their sustainability strategies? If the latter, which companies have truly effective CSR strategies driven by independent departments?
All views welcome!
Chris
Tags: corporate social responsibili…, csr, green marketing, greenwash, strategy, sustainability, sustainable development
Replies to This Discussion
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Permalink Reply by Chris Jarvis on -
I couldn't agree more that CSR has to be integrated throughout the business organization in order to live up to it's promise. Creating silos is almost always never effective (I would say never, but I am sure there is an example of how they work well somewhere out there). I'm curious about who has specific CSR type responsibilities at Nestle. For example, community engagement, or employee volunteering. If it is diffused throughout, then I can see how that wouldn't need a CSR czar. Yet without a central focus aligned with the Nestle brand, and set in a long term partnership with select nonprofits, employee volunteerism only realizes moderate outcomes.
So not sure, but I can't argue with a priority of values over job descriptions. Good article, thanks Chris.
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Permalink Reply by Paul Hughes on -
If this is any indication, you may want to rethink your post...
Communities Demand Bottling Giant Nestle Stop Undermining Local Control of Water
http://www.alternet.org/water/138806/communities_demand_bottling_gi...
Paul
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Permalink Reply by Carrie on -
Chris, you bring up a great point and like most elements to CSR I am guessing both scenarios could work depending on the organization's dynamics.
While my direct experience has been in driving from a CSR-specific role, I have observed others are having success by letting it be innate to all sorts of roles. I propose the ideal situation is over time a company who started with CSR professionals, eventually embraces the efforts into its culture entirely.
I think our position has been from the beginning we were already doing many of the right things well, it just needed some framework, some context and then we have focused on connecting the right people to each other. So as CSR professionals we sit in the corporate communications department and have two main goals: 1. to engage employees around our programs and 2. to tell the company's responsibility story internally and externally.
We see ourselves as facilitators of the internal evolution to having our whole company think and act with a CSR hat on. And then we focus much of our time collecting the examples, developing the messaging, and delivering the results. So, either officially or not, I think you need ambassadors and thought leaders to provoke the conversation and get people at all levels to consider their actions. These people will identify the "what we do well" piece, and ask the tough questions of "why aren't we doing better" in other areas. Perhaps the best examples are those where a passionate employee has taken on the responsibility in addition to a "day job" and then over time it has either grown into a full-time role, or it has been absorbed into the role of many.
I would be most proud to work at a company like that where it happened so organically that over time no one could remember a time when that wasn't the way things were. But if that isn't the case, I don't think this is the time to discourage those strategies who have CSR professionals leading the way, just to keep in mind if we do our jobs really well, in five years we may not be needed. And as difficult as that may be to think about now, I think it would be a great thing for corporations in the future.
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Permalink Reply by Chris on -
Thanks Chris, Paul and Carrie. I'm pretty new on Development Crossing and posted the - rather mischievously titled - piece to have an interesting conversation with folks like you. It's much appreciated. As I know you gathered, the main point of the post was to advocate an integrated CSR/sustainability strategy, not necessarily to say we should fire all CSR staff immediately...
To your individual points:
Chris- The role of the CSR folks at Nestle, at least as I understand it based on my conversations with them, is to aggregate the stories of where Nestle is doing good in the community through their core business activities. I'm not too sure beyond that.
Paul - yeah, I'd definitely agree that Nestle is far from perfect. Then again, I think that's true of any large, complex organization (especially taking into account the many different interpretations of perfection). Take even Whole Foods Market, whom many of us admire, and the John Mackey chatroom scandal concerning their acquisition last year. Similarly, few companies are all bad - not that this should stop us pointing out examples of "corporate misbehavior". I suspect though, that values integrated throughout a company and operationalized in practice from many different points rather than a central node is going to be less susceptible to being just a PR-CSR strategy.
Carrie- thanks for the thoughtful response. I'd really love to hear ideas and examples of how to drive the evolution to the business units taking more responsibility for the CSR - conceptualizing programs, creating new business models, piloting initiatives, reaching out to the community and so forth.
Thanks again for the comments and I'll look forward to any follow ups!
Chris
http://csr4ceos.typepad.com
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Permalink Reply by Barton Alexander on -
A very provocative headline in this economic climate! But the main point is spot on: authentic corporate responsibility cannot be a staff function, but rather, must be wired into the business. Just as the scope of responsibility activities has widened to include governance and ethics, product design and marketing, environmental stewardship, community investment and supply chain, so the management and governance of responsibility now includes the entire enterprise. And just as corporate philanthropy has become the “added value” rather than the core, so the effective corporate responsibility professional is now more of the internal guru than the center of action.
How this is managed will not be the same in every company. Companies that got into the sustainability or CSR space early now may have to reorganize. Companies that are new to the game may find that they need to start building from the top down, deploying central staff to bring new views, values and strategies to line management.
As the first responsibility head at Molson Coors, I found my job to be quite different from either of these cases. Line leaders were already doing tons of CSR work, but they thought of it as part of their job, not as something special or different. My challenge has been to collect the stories, share the best practices, help align strategies and let the world know the good things that were, for the most part, happening already. Our CEO understood that in talking about this dimension of the business, we had to report our progress and our failures, as he said, “be transparent, warts and all.” Take a look at what we’re doing at www.molsoncoors.com/responsibility.
Our CEO is Peter Swinburn, and at the Tremblant Forum in Quebec last fall, he specifically commented on how he sees accountability for CSR. Here are a few lines from his keynote speech:
Put People in Charge Who Can Actually Do Something – The existing leadership is accountable for responsibility performance, using corporate responsibility experts as their coaches and consultants. This means that we don’t need a large department. Instead, we use cross-functional and cross-geographic teams. In fact, I only have one person who owns responsibility as his full time job (he’s sitting right over there)…but it is a part of everyone’s job at Molson Coors, particularly the leadership team. We have the same hard business objectives and deliverables for these targets as we do with any other area of the business. And just like the rest of our business, we actively engage all of our employees to find innovative ways to achieve our goals.
I was the guy he pointed to. . You can read a bit more about how I see my job at http://www.developmentcrossing.com/forum/topics/exclusive-interview.... I’m a member of Development Crossing, so let me know what you think of our perspectives as well as our corporate responsibility performance.
Cheers!
Bart Alexander
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Permalink Reply by Paul Hughes on
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Hi Chris,
You are fundamentally bang on. All employees should be incorporating some type of CSR/ethical thinking into their daily actions/decisions. Like defense on a team... although there is almost always a defensive coordinator who continually makes the principles and concepts of defense a priority.
CSR is not greenwashing, ethicswashing fluff... The PRing of CSR as u put it... Putting the truth/reality back into CSR... We find ourselves as a society in our present predicament in large part due to the single minded pursuit of the dollar at all costs. CSR brings us back to reality in so many ways. You can't just talk about defense, you have to practise it and work on it constantly to perfect it and make a real difference in the outcome. More than just picking the low hanging fruit. This commitment to 'Corporate Defense' builds the foundation for a powerful Corporate Offense in the marketplace.
Otherwise you get this...
http://earthfirst.com/profits-before-people-7-of-the-world%E2%80%99...
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Permalink Reply by Chris on
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Thanks Bart and Paul.
Bart- Thanks I enjoyed reading more about the approach of Molson-Coors.
In your interview, you mentioned that every senior executive has corporate responsibility goals built into their deliverables. I think this is great. Was this achieved by influence from you and the CEO/others, or through something more institutional?
Also, I poked around on the site, but I couldn't see the financial ROI (anticipated or actual) of measures such as energy/water savings detailed anywhere. Did I miss them? I'd be really interested to see if Molson-Coors are directly benefiting from a sustainability strategy. Would you mind sharing?
Paul- I absolutely agree that CSR is good defense. Lack of comprehensive individual and corporate integrity and ethics is an Enron/WorldCom/Arthur Andersen-type meltdown waiting to happen.
I'd also argue though that it can be good offense too when integrated into business strategy. Savings through "greening" measures benefit the bottom line. Innovations such as GE's Ecomagination products bring in billions of dollars in revenue for the company while saving consumers money and sapping less energy. Underserved markets offer opportunities to address social issues while increasing profit - Grameen Phone in Bangladesh is one of the most noted examples.
Here's to CSR as defense AND offense...
Chris
http://csr4ceos.typepad.com
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Permalink Reply by Barton Alexander on
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Thanks, Chris. The integration of responsibility objectives started with our business leaders who saw this dimension as just part of their jobs. Then, the Executive Leadership Team (our CEO and his direct reports) determined that corporate responsibility is key to our business success, and needs to be tracked and measured just like other corporate goals. So, that thinking lead to more rigor in how the annual objectives get baked into each leader's performance plan. As to savings, we're just getting our metrics in shape, and really do appreciate the idea of putting those up on the website when we're confident in the numbers. Becoming more transparent, "warts and all," is one of our key objectives. Finally, I completely agree that the real ROI will come from innovation, even more than from cost and risk reduction. Cheers! Bart
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Permalink Reply by Matthew Rochte on -
Chris,
What a great juicy topic to leap into Development Crossing with - thought provoking, informative, clarifying, and questioning. The comments have been equally matched. Thank you and thank you to all the other experts and thought leaders here.
The timing of your post, my discovering it, and a query I got on Twitter last night have gotten my little-grey-cells and fingers typing on the subject. I was asked about the interrelation between CSR and PR. I too believe that CSR is and must be an integrated business strategy and approach by leadership rather than a pet project, problem child, or trend. My thoughts comparing PR v CSR can be found in this article. http://www.opportunitysustainability.com/?p=323
Silos:
Chris, I agree that "Corporate Social Responsibility is too complex and important a concept for it to be successfully accomplished by an often isolated, powerless, small and junior set of employees." However, CSR as pointed out by Carrie and Barton Alexander is also more than a single leader. It is a community effort, it is / needs to be a true value, philosophy, and operating agenda at all levels from frontline to boardroom. It is about empowering employees to do the right thing.
I believe the most successful CSR/Sustainability efforts are spearheaded by a director on the board or a CRO/Sustainability Director reporting to the board. With that board connection the CSR/Sustainability efforts become integral to strategic advancement of the company. It requires exceptional leadership by an individual and a team that get it at their core that CSR/Sustainability are integral to the long term success and sustainability of the company.
Leadership Qualities
While at the CRO/SustainPro conference last Fall, Bob Pojasek called for list of skills and attributes that a CSR/Sustainability leaders should have. This is a partial list of attributes: high integrity, ethics, openness, systematic, flexible, process focused, donfident, people sensitive (high EQ), diplomatic, proactive, and a focus on business excellence. Partial list of skills: project management, interviewing and listening, community building, risk management, process improvement tools (coaching skillset), written and spoken communication skills, analyze information (P&L experience), and verifying data/research skills. I would add the ability to communicate and integrate concepts cross-company & cross-functionally as a must.
Integration of CSR/Sustainability/Smart Business Strategy:
I think sustainability, csr, and smart business leadership are integrally linked. I have been an executive coach as long as I have been consulting on sustainability. They goals are one in the same - create a sustainable, successful business, life, community, and leadership structure.
Hurrah! for bringing The Sustainable Value Framework model to the table. It is one of my favorite models to use in discussing CSR & Sustainability. In Peter Senge's new book, The Necessary Revolution Senge discusses sustainable value creation and uses a modified form of the Sustainable Value Framework that includes the driving factors (Risks) along with the strategy, and the payoffs for each quadrant. CSR and Sustainability are really about integrating strategies of risk mitigation with sustainability value opportunities.
The Necessary Revolution, may be a seminal work on the the changing business environment and the need for CSR/Sustainability efforts. It showcases the pains, discoveries, and opportunities to be found when NGOs and corporations come together to solve each other's sustainability challenges and desires. Using several case studies, the most striking is the work Coca-Cola and the World Wildlife Foundation have tackled working together to find solutions to each others needs and wearing each other's shoes for a while. This has been an ongoing project for nearly five years involving hundreds if not thousands of individuals at Coke and WWF, but key to the success and lasting sustainability of the project lies in Coca Cola's integration of Sustainability and Corporate Responsibility on the board level. Their commitment has only grown stronger with this collaboration as they reduce costs, increase reputation, and become aware of and save water resources.
Need a New Acronym to address the strategic nature of CSR?
CocaCola uses the combined terms Corporate Responsibility and Sustainability instead of CSR believing that CR encompasses the social responsibility elements. CSR International is proposing CSR v2.0 Corporate Sustainability & Responsibility. Though I am not sure if I fully appreciate the model they are proposing, I do like the shift in focus in the acronym.
I'll close with echoing a statement of perspective, said eloquently by Barton Alexander in his DevCrossing interview,
"CR is a lens that helps identify areas of both risk and opportunity across the enterprise."
Matthew Rochte
www.OpportunitySustainability.com
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Permalink Reply by Chris on
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Thanks Bart and Matthew, for the comments. It's been a thoroughly enjoyable - and educative - forum discussion so far.
Congrats too to Barton on the good quarterly performance of Molson-Coors. This may be a CSR/sustainability focused site/thread, but let's not forget along the way that our companies need to make a profit!
Matthew- phenomenal post/reply and I checked out your website, which I loved: www.opportunitysustainability.com. I'm going to add it to my blogroll.
Best wishes,
Chris
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Permalink Reply by Gena Rotstein on -
Hi Chris;
My clients are small businesses, and so big CSR departments are not in their framework. However, what we talk about and build are Corporate Citizenship programs that, I think, mirror what you are saying in this post. When the CEO of a company is acting as a corporate citizen, that behaviour is modeled for the the rest of the company and drives the direction of how the company interfaces with its defined communities.
Gena
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Permalink Reply by elaine cohen on -
hi to chris and all those who have contributed to this discussion so far.
My view is rather different to the strongly supported thought that everybody should do CSR and therefore it should manage itself, with a little help from the organizational storytellers. This does a great injustice to the business value of CSR.
I view CSR as a strategic discipline which needs to gain greater professional leverage and legitimacy. Just as any staff function, CFO, HR Director, CTO etc, the responsibility for implementation lies with the line, but the driving of total systems strategic approach and policy setting rests with the integrator - the senior staff person who is the primary champion and expert, and who has a strong voice on the Company leadership team. Without this, there is CSR anarchy which, at certain levels may offer glimpses of corporately responsible activity, but is unable to generate true business value at a corporate level.
I would certainly not abandon CSR departments. I would ensure they are focused, effective and contributing .We have to remember that CSR is not just about ethics or community involvement. It's about generating greater long-term core business value. I agree that it is a "principle"not a department, but so is effective cash management, quality, human resources, technology development ... etc .. all of who have managers focused on ensuring the principles get translated into business action in a consistent and effective way. Part of this is assisting the organization in driving a culture in which everyone is motivated to do their bit.
Smaller organisations, SME's , may of course not have resource to maintain a multitude of staff functions, but somewhere there needs to be a champion and integrator, often the CEO. In a small business, this is manegeable, but in a global corporation, it gets lost.
elaine, www.b-yond.biz
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